Oil Surges Above $105 as Tanker Attacks Intensify in Middle East
- Brent crude climbed 4% to more than $105 a barrel, while US oil crossed the $100 mark for the first time since May 21.
- Intensifying attacks on vessels and restricted tanker movement through the Strait of Hormuz have heightened fears of supply disruptions.
- Analysts say stronger Chinese demand could extend the rally, despite OPEC again lowering its global oil demand growth forecast.
Oil prices surged by around 4% on Thursday as escalating attacks on tankers in the Middle East deepened concerns over disruptions to global energy supplies.
Brent crude futures rose by $4.05, or 4%, to $105.26 a barrel by 1215 GMT. US West Texas Intermediate crude gained $3.99, or 4.15%, to reach $100.04 a barrel, crossing the $100 threshold for the first time since May 21.
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Brent has now climbed more than 30% from the lows recorded in early August. The sharp recovery has been driven by renewed fighting after efforts to secure a permanent ceasefire between the United States and Iran failed to produce an agreement.
Fresh concerns emerged after Iran-aligned Houthi fighters seized control of Yemen’s port city of Mocha, increasing uncertainty over commercial shipping through the Red Sea.
Tanker movement through the Strait of Hormuz also remains severely restricted as attacks on vessels intensify. The strategic waterway is one of the world’s most important energy routes, and any prolonged disruption could significantly reduce Gulf oil exports and place further pressure on international prices.
Iran said it attacked 10 ships near the Strait of Hormuz on Wednesday after the United States targeted five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps warned that it would intensify its response if further attacks were carried out.
PVM analyst John Evans said the recent increase in prices reflected the market’s growing belief that the conflict could last longer than initially expected. Reduced production and exports, he added, could keep supplies tight and prices elevated.
The future direction of the oil rally may also depend heavily on China, the world’s largest crude importer. After several months of relatively subdued demand, China has recently increased its oil purchases, strengthening physical crude markets, according to ING analysts.
A sustained rise in Chinese buying could magnify the effects of supply disruptions and drive prices higher. However, any renewed slowdown in imports could restrict further gains.
David Jorbenaze, global oil market lead at commodities information provider ICIS, said weak Chinese demand had supported the bearish outlook for several months, but the recent recovery in purchases could alter market expectations.
Despite the surge in prices, OPEC has reduced its forecast for global oil demand growth in 2026 for the fifth consecutive time. In its latest monthly report, the organisation projected that worldwide demand would increase by 380,000 barrels per day this year.
