Oil prices have increased about 1% after Iran seized a foreign oil tanker smuggling fuel in the Larak Island of the Persian Gulf.
Brent crude LCOc1 futures edged up 58 cents at $64.24 a barrel, while US West Texas Intermediate crude CLc1 futures increased 43 cents at $57.21, Reuters reported.
The oil tanker, which was smuggling fuel to foreign customers, could not be identified and had been carrying one million litres of fuel. It was intercepted south of Iran’s Larak Island in the Strait of Hormuz.
The vessel that Iran towed after receiving a distress call, was later impounded with the order from the court as it was found be smuggling fuel. Recently, British Royal Marines stormed an Iranian oil tanker, Grace 1, which was believed to be carrying oil to Syria.
US officials said that they were not sure whether an oil tanker towed into Iranian waters had been seized or rescued.
Data released by the US Energy Information Administration (EIA) showed a larger-than-expected decline in crude stockpiles last week. The EIA’s report highlighted a fall in US crude inventories by 3.1 million barrels, which was more than analysts’ forecasts for a decrease of 2.7 million barrels.
Gasoline stocks increased by 3.6 million barrels, which is against their expectations, according to a Reuters poll for a 925,000-barrel drop.
Oil prices are further under pressure after US President Donald Trump threatened to impose additional tariffs on China. For the second half of 2019 and in 2020, Barclays lowered its oil price forecasts, expecting slower demand growth due to a weaker-than-expected global economic backdrop.
