Oil prices climbed about 4 per cent on Thursday as renewed concerns over the Middle East conflict and production cuts ahead of Hurricane Isaias threatened global crude supplies.
Brent crude futures settled US$4.08, or 4.1 per cent, higher at US$104.28 a barrel, while US West Texas Intermediate crude gained US$3.21, or 3.6 per cent, to US$91.49. Both benchmarks rose more than US$5 at one point, with Brent reaching its highest level since Sept 29.
Prices eased from their intraday peaks after US President Donald Trump said Washington was holding productive discussions with Iran and would not attack the country before the Nov 3 US midterm elections.
Iran was reviewing Washington’s response to a proposal to reopen the Strait of Hormuz within seven days, according to the Tasnim news agency. However, the US announced fresh sanctions targeting individuals, networks and 17 vessels involved in transporting Iranian crude, petroleum products and petrochemicals.
Shipping risks remain elevated, with tanker attacks in the Strait of Hormuz reaching their highest weekly level since the conflict began, Reuters reported. The waterway carried about 20 per cent of global oil and fuel shipments before the war.
“The frequency of Iranian attacks on ships is now at the highest point since the war began, and likely to intensify further,” said Saul Kavonic, head of energy at MST Marquee.
Meanwhile, Hurricane Isaias prompted offshore producers to suspend operations in the US Gulf of Mexico. About 1.3 million barrels per day, or 62.9 per cent of current regional oil production, had been shut in as of Thursday, according to the US Marine Minerals Administration.
The rally came a day after oil prices fell following an agreement by the International Energy Agency to accelerate the release of oil stocks and prioritise diesel supplies amid rising fuel costs and war-related disruptions.
Reuters
