Oil prices extended their gains on Thursday as investors reacted to reports of an expanded U.S. military presence in the Middle East and renewed concerns over the conflict with Iran.
At 13:59 ET, Brent crude futures for December rose 4.9% to $102.83 per barrel, while November West Texas Intermediate (WTI) crude futures gained 3.4% to $93.43.
Oil Prices Continue Strong Rally
The previous front-month Brent contract settled at $103.50 before expiring on Wednesday.
Brent gained around 14% during September, recording its strongest monthly increase since July. WTI rose approximately 5% over the same period.
Geopolitical risks and concerns about global fuel supplies have remained major drivers of the recent rally.
U.S. Military Buildup Adds to Iran Concerns
The Wall Street Journal reported that the United States is deploying a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East.
The deployment could add approximately 9,000 to 10,000 U.S. military personnel to the region.
The newspaper has also reported that President Donald Trump told aides he expects U.S. strikes on Iran could resume following the November midterm elections if diplomatic efforts fail. The account has been attributed to U.S. officials and has not been presented as a confirmed timetable for military action.
The possibility of renewed escalation has increased concerns about further disruptions to Middle Eastern energy supplies.
Russian Energy Infrastructure Also in Focus
Oil prices also received support from continued attacks on Russian energy infrastructure.
Ukraine has targeted Russian refineries and other oil facilities in recent months, contributing to tighter supplies of refined fuels, including diesel.
Damage to refining capacity has become increasingly important for global fuel markets as inventories remain tight in several regions.
Middle East Oil Exports Show Signs of Recovery
Despite the geopolitical uncertainty, crude oil exports from the Middle East improved during September.
Regional exports reached approximately 16.33 million barrels per day, their highest level since the conflict began in February, according to Kpler data reported by Reuters.
Saudi Arabia also resumed tanker loadings from the Red Sea port of Yanbu after restoring operations on its East-West Pipeline.
These developments have provided some relief to global supply concerns.
Regional Oil Flows Remain Below Pre-Conflict Levels
However, Middle East crude exports remain well below levels recorded before the conflict.
September exports were approximately 3.2 million barrels per day below February levels, leaving the oil market vulnerable to renewed disruptions.
This supply gap means that developments involving major producers and shipping routes can still trigger significant swings in crude prices.
U.S.-Iran Diplomacy Remains Uncertain
Diplomatic efforts between Washington and Tehran also remain in focus.
Iran has continued to pursue talks aimed at reducing tensions, while disagreements remain over sanctions, shipping access and the Strait of Hormuz.
Reuters reported that diplomatic efforts remain difficult, with Iran preparing for the possibility of further military escalation while still pursuing negotiations.
The Strait of Hormuz remains particularly important because disruptions to the waterway can have major consequences for global oil and LNG supplies.
U.S. Crude Inventories Rise
Meanwhile, U.S. crude inventories increased by 922,000 barrels during the latest reporting week.
Analysts had expected inventories to fall by around 700,000 barrels.
An unexpected increase in crude stocks can normally weigh on oil prices because it suggests supply is exceeding demand.
However, concerns surrounding refined fuels painted a tighter picture of the broader U.S. energy market.
Gasoline and Distillate Inventories Decline
Gasoline inventories fell by approximately 1.7 million barrels, while distillate stocks dropped by around 2.3 million barrels.
Distillates include diesel and heating oil, making these inventories particularly important for transportation and industrial demand.
Low diesel supplies have become an increasingly significant issue as geopolitical disruptions and refinery problems tighten global fuel markets.
Oil Market Remains Highly Sensitive to Geopolitical Risk
For now, geopolitical developments remain one of the strongest influences on oil prices.
Improving Middle East exports may provide some supply relief, but regional flows have not fully returned to pre-conflict levels.
At the same time, tighter fuel inventories and uncertainty surrounding U.S.-Iran relations continue to support a significant geopolitical risk premium in Brent and WTI crude prices.
Traders will therefore remain focused on Middle East supply flows, diplomatic developments, U.S. inventories and any further changes in military activity across the region.
