Oil prices surged more than 3% on Thursday, extending a strong rally as the escalating conflict involving the United States, Israel, and Iran raised fears of prolonged disruptions to critical Middle East energy supplies.
Brent crude climbed $2.44, or about 3%, to $83.84 per barrel by 07:22 GMT, marking the fifth consecutive session of gains. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose $2.44, or 3.27%, to $77.10 per barrel.
Energy markets remained highly sensitive to developments in the region. Analysts from ANZ noted that oil traders are increasingly concerned about potential supply disruptions, particularly involving shipping routes through the Strait of Hormuz, one of the world’s most important energy transport corridors.
Middle East conflict raises supply risks
The conflict intensified early Thursday when Iran launched a new wave of missile attacks on Israel, forcing millions of residents into bomb shelters as the war entered its sixth day. The attacks came shortly after diplomatic efforts in Washington to halt U.S. military actions against Iran were blocked.
Tensions had already escalated on Wednesday when a U.S. submarine sank an Iranian warship near Sri Lanka, resulting in significant casualties. At the same time, NATO air defense systems intercepted an Iranian ballistic missile reportedly heading toward Turkey.
Shipping activity in the region has also been affected. Iranian forces have reportedly targeted oil tankers operating in or near the Strait of Hormuz, while explosions were reported close to a tanker off the coast of Kuwait, according to the United Kingdom Maritime Trade Operations.
The political situation in Iran has also added uncertainty. The son of Iran’s late supreme leader has emerged as a leading candidate to succeed him, signaling that Tehran may continue resisting international pressure following the military campaign launched by the United States and Israel.
Oil production and exports disrupted
The conflict has already begun affecting energy production and export flows across the region.
Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), has reportedly cut output by nearly 1.5 million barrels per day due to limited storage capacity and disruptions to export routes.
Meanwhile, Qatar, the largest liquefied natural gas (LNG) producer in the Gulf, declared force majeure on its gas exports, with industry sources saying that normal production levels may not return for at least a month.
Oil traders remain broadly bullish on prices, noting that a quick resolution to the conflict appears unlikely.
Shipping disruptions in the Gulf
The conflict has significantly disrupted maritime traffic in the Gulf region. According to ship-tracking data from the MarineTraffic platform analyzed by Reuters, more than 200 vessels — including oil tankers, LNG carriers, and cargo ships — were anchored in open waters near major Gulf producers such as Iraq, Saudi Arabia, and Qatar.
Hundreds of additional ships remained outside the Strait of Hormuz, unable to reach regional ports. The narrow waterway is one of the most critical energy routes in the world, handling around one-fifth of global oil and liquefied natural gas shipments.
In response to the uncertainty, China’s government has asked domestic companies to suspend new contracts for exporting refined fuel and to attempt to cancel previously scheduled shipments, according to industry and trade sources.
