Watch: Oil Markets on edge amid Red Sea attacks; Asian coal market eyes impending strike

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This week, oil markets are on high alert following a significant Houthi attack in the Red Sea on a Greek tanker carrying Iraqi crude.

While routes have adapted, the Red Sea remains crucial for oil transport and this incident marks one of the most serious threats to shipping in the region, prompting concerns about security and supply.

S&P Global Commodity Insights FIRST TAKE analysts have said an escalation in conflict between Israel and Hezbollah on the border with Lebanon could have a bullish impact on oil prices when markets open. However, any risk premium will be offset by regional tensions stabilising.

Industry leaders will gather at the Offshore Northern Seas conference in Stavanger, Norway, over August 26-29, where Norwegian officials will likely discuss the outlook for flagship oil field Johan Sverdrup, and the Barents Sea.

In Asia, South Korean refiners are poised to maintain strong imports of US crude, bolstered by an extension of freight incentives until December 2027.

This extension is expected to enhance their refining margins significantly, allowing South Korea to import a record amount of US crude in the first half of the year.

In India, the port workers' union has called for an indefinite strike at major ports starting Wednesday to address wage revisions and pension benefits.

The strike could affect Asian thermal coal trade by causing ship congestion but may not result in higher prices since demand for thermal coal has been weak.

Similarly, a railroad strike in Canada on Aug. 22 could still have implications for North American supply chains this week.

Shipments of grains and biofuels, scrap metal, chemicals, oil and gas between the US and Canada were in the crosshairs, and sources have said that the backlog from one day of strike action takes almost seven days to clear.

As a heavy planned maintenance schedule begins, Norwegian gas production faces a sharp decline, potentially impacting 55% of the country’s output capacity in mid-September.

In the US, The Public Utility Commission of Texas is set to discuss a recommended portfolio of generation capacity additions on Thursday, which could receive up to $5 billion in financing to incentivize gas-fired plants.

I’m Maite Perez, thank you for kicking off your Monday with S&P Global Commodity Insights.