Oil prices moved higher on Thursday as escalating tensions in the Middle East renewed fears of potential supply disruptions.
Fresh US strikes on Iran and renewed Israeli warnings toward Tehran supported crude prices. However, comments from Russian President Vladimir Putin suggesting openness to peace talks with Ukraine helped limit the gains.
Oil Prices Extend Their Rally
Brent crude futures rose 15 cents, or 0.16%, to $95.78 a barrel by 1:00 p.m. ET.
US West Texas Intermediate crude gained 63 cents, or 0.69%, to $91.64 a barrel.
Both benchmarks were heading for a fourth consecutive day of gains. They also reached six-week highs earlier in the session.
US Strikes on Iran Raise Supply Concerns
Market sentiment remained focused on the latest escalation between the United States and Iran.
Iran’s health minister said 18 people were killed and 108 were wounded in US strikes across the country.
The Iranian Red Crescent also reported casualties at a wedding ceremony near the Strait of Hormuz, while the semi-official Tasnim news agency said three Iranian Army pilots were killed.
The latest attacks marked the most significant exchange of fire between the United States and Iran since July.
Israel Renews Warning Against Iran
Israeli Defence Minister Israel Katz also renewed warnings against Tehran.
Katz said Israel could target both military and civilian infrastructure, including energy facilities, if Iran launched further attacks against Israel.
Saxo Bank analyst Ole Hansen said those comments helped push oil prices higher.
Concerns over possible damage to energy infrastructure have increased the geopolitical risk premium in crude markets.
Putin Comments Limit Oil Price Gains
Oil’s advance was partly offset by comments from Russian President Vladimir Putin.
Putin said there was a chance of reaching an agreement to end the war in Ukraine. He also said countries including the United States and China were prepared to support a peace settlement.
Any reduction in attacks on Russian refineries could ease concerns about fuel supply disruptions and help normalize production.
That possibility placed some downward pressure on oil prices during Thursday’s session.
Strait of Hormuz Traffic Declines
Shipping activity through the Strait of Hormuz also remained in focus.
Preliminary data showed that only six commodity vessels passed through the strait on Wednesday.
That was down from 11 vessels the previous day and well below the 10-day average of roughly 13.
The Strait of Hormuz is one of the world’s most important energy transit routes, making any disruption especially significant for global oil markets.
Iran Tightens Restrictions on Shipping
Iran has also added more ships to a list of vessels it considers non-compliant.
Those vessels could face fines, confiscation or detention if they attempt to pass through the Strait of Hormuz.
At the same time, Iran has allowed some Iraqi vessels to continue using the route.
Iraq increased oil exports to approximately 2.34 million barrels per day in August, up from about 1.35 million barrels per day in July.
Exports are also expected to remain elevated in September, supported by heavy discounts and Iranian approvals for Iraqi tankers.
Tight Oil Market Supports Prices
UBS energy analyst Giovanni Staunovo said the global oil market remains tight, with inventories continuing to decline.
Falling inventories can support higher crude prices when demand remains firm.
The combination of tighter supply, geopolitical risks and lower shipping activity through Hormuz has helped keep upward pressure on oil.
Higher Oil Prices Add to Inflation Concerns
Rising crude prices are also feeding into broader inflation expectations.
Higher energy costs can increase transportation and production expenses across the economy.
As a result, stronger oil prices have contributed to increased expectations that the Federal Reserve could raise interest rates this month.
For now, geopolitical tensions remain the dominant driver for crude markets, while developments in Ukraine and the Strait of Hormuz continue to shape the outlook.
