Brent crude settled up $1.31, or 1.9%, at $71.66 a barrel, its highest close since late July. U.S. West Texas Intermediate rose $1.24, or 1.9%, to $66.43, the strongest finish since early August. The gains followed Wednesday’s more than 4% rally, as geopolitical risk continued to dominate market direction.
Traders pointed to mounting military activity in the region and increasingly hawkish rhetoric from Washington. U.S. President Donald Trump warned that Iran must reach a deal over its nuclear program or face consequences, appearing to set a short deadline for potential action. The United States has deployed additional military assets to the region, including aircraft carriers and warships, while Iran announced rocket launches and joint naval exercises with Russia. The moves came days after Tehran temporarily shut parts of the Strait of Hormuz for military drills.
The strait remains a focal point for markets, as roughly 20% of global oil supply passes through the narrow waterway. Any disruption there would have immediate implications for global crude flows.
Beyond geopolitics, supportive U.S. inventory data added momentum. U.S. crude stocks fell by 9 million barrels in the latest week, sharply contradicting expectations for a build. Gasoline and distillate inventories also declined as refining utilization and exports increased, suggesting solid underlying demand.
On the supply side, crude exports from Saudi Arabia dropped to their lowest level since September, according to Joint Organizations Data Initiative data. However, traders remain mindful that OPEC+ has signaled it may resume gradual output increases from April, a factor that could temper further price gains if tensions ease.
Meanwhile, Russia-Ukraine peace talks in Geneva concluded without a breakthrough, leaving uncertainty over sanctions and Russian export flows unresolved.