Oil prices rise to five-week high on US-Iran attacks, Houthi blockade threat

By Scott DiSavino

NEW YORK, July 21 (Reuters) - Oil prices climbed astir 2% connected Tuesday to a five-week high, connected worries that vigor proviso disruptions could worsen successful the Middle East owed to much attacks ‌between the U.S. and Iran and a threatened naval blockade of Saudi Arabia by Yemen's Houthis.

Brent futures ‌rose $2.12, oregon 2.4%, to $91.34 a tube astatine 10:53 a.m. EDT (1453 GMT). U.S. West Texas Intermediate crude roseate $1.80, oregon 2.2%, to $85.03.

Brent was connected way for its ​highest adjacent since June 10, WTI for its highest since June 11. Brent was successful technically overbought territory for a seventh time successful a row.

Two lipid tankers carrying Saudi crude to Asia reversed people successful the Red Sea connected Tuesday aft threats from Yemen's Iran-aligned Houthis. U.S. forces bombed targets successful the southbound and westbound of Iran overnight, Tehran targeted U.S. sites successful ‌Bahrain, Kuwait and Jordan and astatine slightest ⁠one tanker was deed successful the Strait of Hormuz.

"The optimist whitethorn spot the latest American attacks arsenic a past effort to fortify the negotiating presumption earlier a compromise is reached and ⁠the Strait of Hormuz is reopened," an SEB Research enactment said.

"However, the hazard is simply a much prolonged stalemate, with continued uncertain vigor flows, higher lipid prices and recurring attacks."

The Houthis announced a naval blockade connected Saudi Arabia connected Monday, expanding the struggle and raising ​the ​threat to planetary vigor supplies and commercialized beyond the Gulf.

The 2 ​tankers, which loaded Saudi crude bound for China ‌and India this week, made U-turns and were headed toward the Suez, shipping information connected LSEG showed. However, sources said Saudi Arabia's Red Sea larboard of Yanbu was operating normally.

"The threats of a naval blockade connected Saudi Arabia by the Houthis are important due to the fact that they rise the hazard of disruption to different large lipid exporter," said Tim Waterer astatine KCM Trade.

Crude lipid exports from Saudi Arabia fell for a 3rd consecutive period successful May to a grounds low, information from ‌the Joint Organizations Data Initiative (JODI) showed connected Tuesday.

In Asia, meanwhile, substance lipid ​markets extended gains connected Tuesday connected worries astir the Houthi naval blockade ​threat against Saudi Arabia done the Red Sea's ​southern gateway.

U.S. OIL INVENTORIES

The lipid marketplace waited for play retention reports from the American Petroleum Institute (API) ‌trade radical aboriginal connected Tuesday and the U.S. ​Energy Information Administration (EIA) connected Wednesday.

Analysts estimated ​energy firms pulled 0.5 cardinal barrels of crude from retention during the week ended July 17.