JAKARTA - European oil and gas prices rose after reports of attacks on LNG carriers near the coast of Oman as they exited the Strait of Hormuz. This line is not a normal waterway. Hormuz is one of the world's main energy shipping routes.
Anadolu Agency, quoted Tuesday, April 7, reported that the European benchmark natural gas price rose by more than 4.5 percent to 46 euros or about 52.5 US dollars per megawatt-hour on Tuesday at 07.05 GMT. The increase came after gas prices had closed out losses in the previous session.
LNG is liquefied natural gas that is usually sent using special ships. Therefore, reports of attacks on LNG vessels near Hormuz quickly made the energy market wary.
Oil prices also strengthened. Brent crude, the international benchmark for oil prices, rose 1.2 percent to near $73 a barrel. The position is Brent's highest level in a week.
Iran's state television, IRIB, reported that the ship was attacked after allegedly ignoring warnings. However, IRIB did not directly claim responsibility for the attack.
Reports of this attack come as the energy market is also looking at the weather in Europe. Forecasts show that extreme heat waves are likely to hit Northwestern Europe again. Hot weather usually encourages the use of air conditioners, so electricity demand also goes up.
The increase in electricity demand adds to concerns about European gas supplies ahead of winter. Currently, gas storage facilities in Europe are filled to around 49 percent. In the same period last year, the filling rate was close to 60 percent.
The incident near Hormuz also raised new questions about the durability of a US-Iranian deal aimed at preventing attacks on the Strait of Hormuz. The line is one of the most sensitive points in global energy trade.
However, the rise in oil prices does not mean that the market has completely reversed direction. Crude oil prices are still near their lowest level since late February. Expectations of an increase in supply are still holding back the pace of prices.
Anadolu also said at least eight Japanese-related ships left Hormuz via a route near Iran. Of these, five of them are supertankers, which are very large tankers that can each carry around 2 million barrels of crude oil.
On the other hand, Saudi Aramco cut the price of Arab Light crude oil for Asian buyers next month. Arab Light is one of Saudi's main types of crude oil. The discount to the regional benchmark price was widened amid weaker market conditions.
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