On Wednesday, Brent crude futures increased by 1.22% to $110.13 a barrel, while U.S. West Texas Intermediate crude rose 1.11% to $98.92 a barrel. The rise in prices is attributed to heightened concerns over supply disruptions in the Middle East, particularly following incidents involving Iran's Revolutionary Guards, who reported that naval mines had targeted three tankers in the Strait of Hormuz.
Additionally, Yemen's Houthi militants claimed responsibility for attacks on Saudi Aramco facilities, further exacerbating regional tensions. These developments have led to a significant increase in global oil shipping costs, with the average crude freight rate now exceeding $20 per barrel, compared to just $3 a year ago.
Goldman Sachs noted that war-risk premiums related to the Strait of Hormuz account for approximately $7 of this increase, while additional costs stem from ship-to-ship transfers outside the Persian Gulf.
The investment bank cautioned that these elevated shipping costs could create wider price disparities between crude grades, pressure refiners' profit margins, and ultimately lead to higher refined fuel prices. Analysts from Goldman Sachs highlighted that Asian refineries are particularly affected, which could threaten their output of refined products and contribute to rising global prices