Brent crude prices crossed $112 a barrel for the first time since May on Thursday as escalating tensions in the Middle East heightened fears of further disruptions to global oil supplies.
Brent futures climbed to $112.50 in early trading before easing to $111.95 at the time of writing. West Texas Intermediate crude also advanced nearly 2.4%, hovering around $99.5 a barrel.
The latest gains came after reports of multiple vessels catching fire in the Strait of Hormuz overnight, with Iran intensifying its attacks on commercial shipping in the strategic waterway. The developments have renewed concerns over energy shipments as the conflict threatens to spread further across the region.
Tanker fires raise fears of wider escalation
Iran’s navy said it had struck four vessels involved in what it described as illegal oil transfers in the northern Gulf. It also reported that three additional vessels caught fire after colliding with mines in the Strait of Hormuz.
The Iranian military further warned of a broader response targeting regional bases used by the United States, adding to concerns that the conflict could widen and put more pressure on oil supplies.
The Strait of Hormuz remains central to the market’s immediate supply concerns, with attacks on vessels raising questions about the security of shipments passing through the waterway.
Oil prices have also become a politically sensitive issue in the United States ahead of the midterm elections.
Rising diesel costs and persistent inflation concerns could create additional pressure on the administration, particularly if energy prices remain elevated.
President Donald Trump has said his administration will not attack Iran before the elections.
However, traders remain concerned over the unfolding situation.
Saudi oil operations face renewed uncertainty
Saudi Arabia is also facing fresh security concerns even as overall oil exports from Gulf producers have recovered to prewar levels.
A day after two people were killed in an attack at an airport in Dammam, Saudi Aramco reportedly instructed staff to evacuate its headquarters in Dhahran and work remotely.
The headquarters had been targeted by Yemen’s Houthi militant group earlier this month.
The latest developments have added to uncertainty surrounding Saudi energy infrastructure, with attacks on regional facilities and shipping routes continuing to influence market sentiment.
PVM Oil analyst Tamas Varga told Reuters that diplomatic efforts to reduce tensions were not convincing enough to ease concerns over supplies.
“Efforts to mitigate tensions, both in Ukraine and the Middle East, lack credibility … reports of Middle East crude oil exports exceeding pre-conflict levels are more than countered by attacks on ships in the Strait of Hormuz and the Houthi strikes on Saudi Arabia and on its oil infrastructure.”
PVM Oil analyst
Tamas Varga
“No de-escalation is anticipated until the US midterm elections, which should keep oil prices elevated.”
US crude inventories add another factor
Fresh US inventory data offered additional support to the oil market, with commercial crude stockpiles falling more than expected last week.
The Energy Information Administration reported that US crude inventories declined by 3.06 million barrels to 412.5 million barrels.
The drawdown exceeded forecasts for a smaller decline, reinforcing concerns about near-term supply availability.
Gasoline inventories also fell by approximately three million barrels. However, distillate stocks moved in the opposite direction, unexpectedly increasing by 1.68 million barrels.
With shipping security, Saudi infrastructure and the prospect of a wider conflict all in focus, oil prices remain sensitive to developments across the region.
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