Brent crude rose about 2% in the first half of Tuesday, 20 October, touching 111.99 USD a barrel, the highest level in five months. The rally reflected worries about a series of roughly 20 attacks on ships over the previous two weeks, which raised fears of serious disruption to Middle East supplies. Prices reversed later in the session after reports of diplomatic contact. The ICE Futures Europe close for the December contract stood at 108.79 USD, down 0.69%. That was the second straight daily decline and the steepest one-day fall since 13 October, leaving the price at its lowest since 15 October.
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Iran's Nournews agency reported that President Masud Pezeshkian discussed mediation and the regional situation in Tehran with Field Marshal Asim Munir, the commander of the Pakistani army. Munir is described as a key go-between in communication between Tehran and Washington. Earlier Pakistani mediation had produced a temporary peace agreement in June. Separately, the Qatari daily Al-Araby Al-Jadeed reported that Qatar and Pakistan had proposed a framework to ease the conflict, and that Washington and Tehran had responded to it positively. The plan reportedly includes passing to Iran the interest earned on Iranian funds worth 6 billion USD frozen in Qatari banks, a partial answer to Tehran's demand for the return of frozen assets.
The IRGC navy said on Tuesday that two tankers caught fire and were immobilised after hitting Iranian mines south of the Strait of Hormuz. The statement was published on the website of Sepah News, the Guards' official outlet, and was cited by AFP. It did not say when the incident happened or which flags the vessels flew. The Guards also said Iran shot down an American MQ-9 Reaper drone overnight from Monday to Tuesday.
Iran mined a widely used central channel after the war with the United States and Israel began in late February. Tehran said passage would be allowed only for vessels that agree shipping with Iran, pay a significant sum and use a new northern route. Washington said it would help ships trying to cross via a track near the Omani coast. Before the war, about one fifth of global oil and gas supplies moved through the strait. AFP cited analysts who said Iran was trying to show it could still disrupt shipping despite the ongoing conflict, and attacks on vessels leaving the Persian Gulf under US naval escort have intensified in recent days.
Abbas Araghchi, Iran's foreign minister, said Tehran had put a proposal to Washington in mid-September to unblock the strait after a temporary ceasefire collapsed. The United States sent comments on the proposal, which Iran is studying. On Sunday, 18 October, Araghchi said Iran maintained an offer to reopen the strait within seven days if the United States accepted Tehran's conditions. Among the seven conditions are lifting the US blockade of Iranian ports and withdrawing US sanctions on Iranian exports. Speaking in Baghdad, he suggested the route to reopening would be clear with a measure of honesty from the American side.
In Dushanbe, where he attended a summit of the Shanghai Cooperation Organisation, First Vice President Mohammad Reza Aref said on Monday, 19 October, that Iran had no choice but to exercise sovereign control over the strait. He said the United States was the cause of the current situation and had to pay the price. Aref added that under Iranian sovereignty, safe passage could be facilitated for friendly nations. Two senior Iranian officials told Reuters in the week of 12 October that the attacks were meant to keep oil prices high and influence the outcome of the November US congressional elections.
West Texas Intermediate for November delivery traded at 103.99 USD a barrel on NYMEX, up 0.32% in the morning, while Brent for December was quoted at 110.00 USD on ICE, up 0.41%. Chris Wright, the US energy secretary, told Fox News that oil flows from the Persian Gulf were running at about 80% of pre-war levels. Hamad Hssain, a commodities economist at Capital Economics, said that escalating attacks on ships in the strait made a renewed fall in oil supply and further price rises more likely.
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Brent crude reached 111.99 USD early on Tuesday, 20 October, then closed at 108.79 USD on ICE after reports of mediation efforts involving Iran, Pakistan and Qatar.
AI text based on reports by pb.pl, Rzeczpospolita, rmf24.pl and other publishers. Published .