Oil prices extended their gains for a fourth consecutive session on Thursday as renewed military tensions between the United States and Iran heightened concerns over possible disruptions to global energy supplies, particularly through the Strait of Hormuz.
Brent crude futures rose 33 cents or 0.4% to US$85.28 a barrel by 0026 GMT, while US West Texas Intermediate (WTI) crude futures increased 42 cents or 0.5% to US$80.02 a barrel.
Both benchmarks had gained around 0.3% on Wednesday and remained close to their one-month highs reached on Tuesday as investors continued to monitor developments in the Middle East.
The latest increase came after the US launched fresh strikes against Iranian military installations, including coastal defence systems and missile sites, following the reimposition of a naval blockade on Iranian ports.
Iran responded by warning it could restrict regional energy exports, saying it was engaged in an “existential war” with the US.
“With tensions in the Middle East flaring up again, buying is taking the lead,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
“While mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85–$87 depending on how the conflict develops,” he added.
The Strait of Hormuz, a key global energy route, handled around a fifth of the world’s oil and liquefied natural gas trade before the conflict began. Any disruption to the waterway could place further pressure on crude supplies and fuel prices worldwide.
Analysts also warned that Iran could potentially use its Houthi allies in Yemen to target the Bab el-Mandeb gateway in the Red Sea, creating risks for another major energy shipping route.
Goldman Sachs said Brent crude could rise above US$110 a barrel in the fourth quarter if Gulf export disruptions persist. However, prices could fall towards the US$60 range by year-end if tensions ease and production recovers faster than expected.
Meanwhile, the US Energy Information Administration reported that crude inventories declined by 1.7 million barrels in the week ended July 10, compared with analysts’ expectations for a 2.6 million-barrel drop.
