Oil prices surged more than three percent on Thursday, extending a multi-day rally as the escalating conflict involving the United States, Israel and Iran heightened fears of prolonged disruptions to critical Middle East energy supplies.
Brent crude rose $2.65, or 3.26 percent, to $83.99 per barrel by 05:20 GMT, marking its fifth consecutive day of gains. US West Texas Intermediate crude climbed $2.76, or 3.70 percent, to $77.42 per barrel as traders reacted to mounting geopolitical risks.
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Analysts said the oil market remained highly sensitive to developments in the region, particularly around the Strait of Hormuz, a strategic shipping route through which roughly one-fifth of the world’s oil and liquefied natural gas passes.
Tensions escalated further early Thursday when Iran launched a wave of missiles at Israel, as the conflict entered its sixth day. The strikes came hours after efforts in Washington to halt US air attacks were blocked.
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Meanwhile, violence continued to spread across the region. On Wednesday, a US submarine reportedly sank an Iranian warship off the coast of Sri Lanka, leaving at least 80 people dead. Nato air defence systems also intercepted and destroyed an Iranian ballistic missile fired toward Turkey.
Shipping security has also deteriorated. Iranian forces reportedly targeted oil tankers in or near the Strait of Hormuz, while explosions were reported near a tanker off Kuwait, according to the United Kingdom Maritime Trade Operations.
The conflict has already disrupted oil production and exports across the region. Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, has cut output by nearly 1.5 million barrels per day due to storage shortages and export difficulties.
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Qatar, the Gulf’s largest liquefied natural gas producer, declared force majeure on gas exports this week, with sources indicating normal production could take at least a month to resume.
Shipping data showed at least 200 vessels, including oil tankers and cargo ships, waiting off the coasts of major Gulf producers as traders brace for prolonged instability.