Oil prices rose following renewed tensions in the Middle East, including U.S. strikes on Iran, Iranian counterattacks on U.S.-allied targets and Israeli threats against Tehran.
Brent crude futures were up $1.66, or 1.7%, at $97.29 a barrel by 1200 GMT, erasing earlier losses, while U.S. West Texas Intermediate crude futures rose $2.03, or 2.2%, to $93.04. Both contracts were heading for their fourth consecutive day of gains after hitting six-week highs earlier in the session.
Earlier, crude futures dropped after President Donald Trump suggested that the United States’ attacks against Iran would likely be short-lived.
According to Iran’s Health Ministry, 18 people were killed and 108 wounded in Tuesday night’s U.S. strikes across Iran. The Iranian Red Crescent said four people were killed and 67 wounded at a wedding ceremony near the coast of the Strait of Hormuz. Three Iranian Army pilots were killed in the U.S. strikes, the semi-official Tasnim news agency reported.
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Iran responded by attacking what it said were U.S. assets in Bahrain, Jordan, Kuwait and Iraq. Kuwait’s army reported further missile and drone attacks early Thursday, saying they were intercepted by air defense systems.
This was the first major exchange of fire since July. Israeli Defense Minister Israel Katz renewed warnings that Israel would “cripple” Iran’s military and civilian infrastructure, including energy facilities, if Tehran launched attacks against it. Saxo Bank analyst Ole Hansen said Katz’s comments may have fueled the rise in oil prices.
Six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 a day earlier and well below the 10-day average of around 13, according to preliminary shipping data from Thursday.
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“The oil market remains tight, with oil inventories still declining globally translating in higher prices. Some support might have also come from ongoing tensions in the Middle East,” said UBS energy analyst Giovanni Staunovo.
Iran has added more ships to the list of vessels it deems noncompliant and subject to fines, confiscation or detention if they try to sail through the strait.
Meanwhile, Iraq increased oil exports to around 2.34 million barrels per day in August from about 1.35 million bpd in July, according to two Iraqi officials. September exports are also expected to increase as heavy discounts and Iranian approvals for Iraqi tankers to pass through the Strait of Hormuz have encouraged buyers.