Brent crude touches $110 as attacks on ships around the Strait of Hormuz escalate

Global oil prices climbed back into triple digits this week as attacks on commercial shipping around the Strait of Hormuz intensified. Brent crude touched $110 a barrel on Friday for the first time since May before settling near $109.9, up about 3.7 per cent on the day, while US benchmark WTI ended at about $101.4.

Traders pointed to Iran's escalating attacks on vessels in and near the strait, Houthi missile fire at Saudi Arabia, and Ukraine's pledge to keep striking Russian refineries.

A week of attacks

The UK Maritime Trade Operations centre (UKMTO) recorded at least 12 attacks on ships in the week to October 16, and said the real figure was likely higher because many vessels did not report incidents. October has seen the most attacks since the US-Israeli war with Iran began at the end of February, Al Jazeera reported. One ship sank and two were disabled. On Saturday, UKMTO reported a tanker damaged by a rocket-propelled grenade fired from a small boat off Saudi Arabia's Gulf coast.

Rival claims over the strait

US Central Command said the waterway was controlled by the United States and its regional partners and that hundreds of ships had passed through in the past week. Iran's Revolutionary Guards countered that the strait was unsafe for vessels that do not coordinate with Iranian authorities, and accused Washington of exaggerating its figures. Ship-tracking data cited by Al Jazeera showed oil flows through Hormuz at roughly two-thirds of pre-war levels.

Mediators including Pakistan and Qatar are passing messages between the two sides, but no breakthrough is expected soon.

Why it matters for India

India imports most of the crude oil it uses, and a large share of its supplies, along with much of its LPG, normally pass through the Strait of Hormuz. A sustained rise in crude prices tends to widen the country's import bill, put pressure on the rupee and feed into inflation, which has already been rising. It also weighs on the finances of state-run fuel retailers if pump prices are held steady.