Tropical storm heads towards the USA: Hurricane and fear of new Iran attacks drive up the price of oil

Oil producers in the Gulf of Mexico are significantly reducing their production due to an approaching tropical storm. At the same time, new plans for possible attacks on Iran are becoming public. The oil market reacts immediately.

Oil prices rose significantly in early trading. During the night, a media report about possible new US attacks on Iran caused oil prices to rise. The price for a barrel (159 liters) of Brent crude oil from the North Sea for delivery in December recently rose by 2.26 percent to 102.56 US dollars.

The White House asked the Pentagon to develop options for attacks on Iran that could be carried out before the US midterm elections in November, according to a report in The Atlantic magazine. The magazine cited two government officials.

The report contradicts the previously widespread expectation that US President Donald Trump would avoid a further escalation of the conflict with Tehran before the elections. The scope and targets of possible attacks as well as whether the government will actually implement the plans are still being discussed, according to the report.

Production in the Gulf of Mexico massively cut back

Oil producers in the Gulf of Mexico have cut production by more than 510,000 barrels per day because of an approaching tropical storm. According to the Bloomberg news agency, this corresponds to around a quarter of regional production. The storm subsequently strengthened into a hurricane. "We expect multiple, dangerous, life-threatening impacts along portions of the northern Gulf Coast starting Friday and continuing into the weekend," said Michael Brennan, director of the hurricane center.

Oil prices have risen sharply this year. The war between the United States and Iran has restricted exports from the Middle East and damaged energy infrastructure. A tanker came under fire in the Persian Gulf around 90 kilometers north of the Gulf Emirate of Qatar. This was reported by the British Maritime Safety Authority (UKMTO) on Platform X, citing a verified source.

Saudi Arabia retaliated in response to the attacks on airports in the country. Coalition forces launched a comprehensive operation and destroyed 82 military targets of the Houthi militia in Yemen in the provinces of Saada, Marib, Al-Jawf and Al-Hudaidah, said spokesman for the Saudi-led military alliance, Turki al-Maliki.

"Supplies from the Middle East have recovered, but tight supplies of oil products, extremely high transport costs and the high risk of Iranian escalation are keeping prices high," Saul Kavonic, an analyst at MST Marquee, told Bloomberg.