Oil prices jumped 5% on Thursday, with both major benchmarks trading at over $100 a barrel as the biggest spike in attacks on shipping since the Iran war began fed worries about further disruptions to already tight supplies.
Brent crude futures were up $5.39, or 5.33%, at $106.60 a barrel by 11:49 a.m. ET (1549 GMT). US oil topped $100 a barrel for the first time since May as West Texas Intermediate crude futures rose $5.16, or 5.37%, to $101.21.
Brent prices have surged by more than 30% from lows touched in early August as a permanent agreement between the U.S. and Iran to cease attacks never materialised and fighting resumed.
Iran-aligned Houthis seized control of Yemen’s port of Mocha on Thursday, posing further threat to Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.
Attacks from Yemen on Saudi energy facilities introduce a fresh source of market risk, expanding concerns beyond Iran and the Strait of Hormuz, said Simon-Peter Massabni, head of business development at XS.com. The threat is no longer confined to a single choke point, but now includes the potential for disruptions to ripple across regional export routes, oil production sites and other energy infrastructure.
U.S. President Donald Trump warned that the U.S. may hit Iran’s Pickaxe Mountain, located near its heavily damaged Natanz uranium enrichment facility, and said the war would likely last beyond the November midterm elections.
Iran said it had attacked 10 ships near the Strait of Hormuz
on Wednesday, after the U.S. hit five Iranian oil tankers.
Iran’s Islamic Revolutionary Guard Corps said it would escalate
its response to any further attacks.
“With prospects for a definitive resolution to the Iran
conflict dimmed and Brent crude prices recently topping $100 for
the first time since July, crude oil markets are now settling
into a prolonged new normal where disruption risk is persistent,
not episodic,” a new analysis by SP Global Energy showed.
Analysts said the durability of the rally will hinge on
China, the world’s largest crude importer.
China has stepped up purchases in recent weeks after months
of subdued demand, boosting physical crude markets, ING analysts
said in a note.
If Chinese buying continues to recover, it could amplify the
impact of any supply disruptions and drive prices higher, while
a pullback in imports could temper market gains, ING said.
“For months the bearish case rested on soft Chinese demand,”
said David Jorbenaze, global oil market lead at commodities
information provider ICIS.
OPEC on Thursday lowered its forecast for world oil demand
growth in 2026 to 380,000 barrels per day, a copy of its monthly
report showed, marking the fifth straight downward revision.
OPEC oil output fell by 640,000 bpd in August, a Reuters
survey found, as Saudi exports faced new disruptions due to the
war in Iran and a U.S. blockade cut Iran’s shipments.
Source: Khaleej Times