Brent crosses $93 a barrel as the Iran war stalemate, tensions around the Strait of Hormuz and tighter Middle East exports raise concerns over global oil supplies.
Oil prices climbed to more than three-week highs on Thursday, extending their gains for a fifth consecutive session as the prolonged Iran war and uncertainty over peace efforts heightened concerns about disruptions to crude supplies from the Middle East.
Brent crude futures for October delivery rose $2.19, or 2.39 per cent, to $93.81 a barrel, while US West Texas Intermediate (WTI) crude gained $2.33 to $88.16 a barrel. Both benchmarks touched their highest levels since July 24.
The rally reflects renewed concerns that lower oil exports from the Middle East could tighten global supplies. Analysts said continued tensions and the lack of progress towards ending the conflict are keeping a risk premium in crude markets.
“Lower oil exports from the Middle East are once again tightening the oil market,” UBS analyst Giovanni Staunovo said.
The UAE’s decision to suspend financial and economic transactions with Iran until further notice has added another layer of uncertainty to the region’s energy outlook. US President Donald Trump has also warned of economic consequences for countries providing support to Iran.
A key focus for oil markets remains the Strait of Hormuz, through which shipments equivalent to roughly one-fifth of global oil consumption passed before the war began on February 28. Current flows remain far below pre-war levels, with shipping traffic showing little improvement as efforts to end the conflict remain deadlocked.
More from BusinessThe disruption has also affected refined fuel supplies. US distillate inventories, including diesel and heating oil, declined for a third consecutive week, according to the Energy Information Administration. However, US crude inventories unexpectedly increased by 4.4 million barrels last week.
Analysts expect oil prices to remain elevated as long as uncertainty persists over the Iran conflict, the Strait of Hormuz and the region’s ability to maintain normal export flows.
