Global oil prices remained above the key $100-a-barrel mark on Thursday as escalating military action between Iran and the United States heightened concerns over supply disruptions in the Middle East, one of the world’s most important energy-producing regions.
Brent crude, the international benchmark, slipped marginally by 0.1 percent to $101.10 a barrel by 0256 GMT after climbing above $100 earlier this week. Meanwhile, US West Texas Intermediate (WTI) crude rose 0.2 percent to $96.24 a barrel.
The latest gains come as tensions between Washington and Tehran continue to intensify, with both sides carrying out their largest attacks on commercial shipping since the conflict erupted six months ago.
Iran said it had targeted 10 vessels near the Strait of Hormuz on Wednesday in retaliation for the sinking of five Iranian oil tankers by US forces. The Islamic Revolutionary Guard Corps (IRGC) warned it would respond more aggressively if further attacks were carried out.
The renewed hostilities have dashed hopes that the two countries would reach a lasting agreement to halt attacks on shipping. Instead, the conflict has expanded, pushing Brent crude nearly 30 percent higher from the lows recorded in early August.
Market analysts said the exchange of attacks is raising serious concerns about the stability of oil exports from the Gulf.
“The tit-for-tat attacks suggest oil flows from the Persian Gulf are likely to remain disrupted for the foreseeable future,” ANZ analyst Daniel Hynes said in a note to clients.
The Strait of Hormuz, a narrow waterway that handled around one-fifth of the world’s oil and gas supplies before the conflict, continues to operate well below normal capacity as security risks deter shipping.
At the same time, pressure is increasing on alternative export routes. Yemen’s Houthi group has intensified strikes against Saudi Arabia, threatening crude shipments moving through the Red Sea and adding another layer of uncertainty to global energy markets.
Christopher Wong, an analyst at OCBC, said uncertainty over the volume of oil passing through the Strait of Hormuz, combined with ongoing disruptions to shipping, was keeping physical crude markets tight and maintaining a strong geopolitical risk premium in prices.
Reflecting those concerns, the physical dated Brent benchmark, which is used to price roughly two-thirds of the world’s crude oil supplies, has remained above $100 per barrel since September 3, according to LSEG data.
The tightening supply outlook has also prompted the US Energy Information Administration (EIA) to revise its forecasts. On Wednesday, the agency raised its oil price projections for both this year and next, citing falling global inventories caused by reduced supplies from the Middle East.
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