Oil Prices Surge as Iran Hacking Adds to Supply Chain Fears

On Monday, oil prices jumped amid growing concerns about disruptions in petroleum supply, exacerbated by a cyberattack on Iran’s fuel network.

The US West Texas Intermediate (WTI) crude oil futures for February delivery closed 0.41% higher at $72.82 per barrel on December 18. Analysts expect the US oil benchmark to gain 0.03% to $72.84 a barrel in the coming session.

Similarly, Brent oil February futures lifted 0.80% to $77.95 with forecasts of a further increase of 0.08% to $78.01 on Tuesday. The threat of delayed shipments was enough to offset the pressure of record black gold production in the US.

Iran-backed Houthi rebels in Yemen have expanded their attacks in the Red Sea. Initially, the militants only targeted shippers suspected of heading to or coming from Israeli ports.

However, recent attacks indicated they have extended their targets to any commercial vessel passing the popular maritime route. As a result, shipping companies have declared a reroute of their tankers, leading to oil delivery delays.

In response, the US said it would take firmer military actions to counter Houthi activity in and around Suez. Approximately 8.00% of the world’s crude oil shipments pass through the Suez Canal.

Vessels would have to take the longer route around South Africa if they were to avoid passing through the Suez.

Iran Oil Network Paralyzed by Cyberattack

The Iranian State TV reported on Monday that a cyberattack on its energy network disrupted 70.00% of its fuel stations, with Predatory Sparrow claiming responsibility for the attack.

The Israel-linked hackers said they attacked with utmost precision to avoid impacting emergency services. Despite its known ties with the group, Israel has yet to comment on the incident.

Some analysts speculated that the cyberattack may be a tit-for-tat response to a recent hacking on a hospital in Israel. Israeli media blamed Iran and Hezbollah for the attack that compromised sensitive patient information.

Economists expressed concern over the incident possibly leading to escalations in the Israel-Hamas conflict.