Oil prices rose sharply on Thursday as geopolitical tensions flared following a fourth day of drone attacks on oilfields in Iraq’s Kurdistan region, highlighting the fragility of supply from the Middle East. Brent crude settled at $69.52 per barrel, gaining $1.00 or 1.46%, while U.S. West Texas Intermediate (WTI) climbed $1.16, or 1.75%, to settle at $67.54.
The attacks, believed to be carried out by Iran-backed militias though no group has claimed responsibility, have cut Kurdistan’s oil output by as much as 150,000 barrels per day—more than half the region’s typical production. Analysts like Andrew Lipow noted the market’s sensitivity to even “low technology” threats, which underscore persistent vulnerabilities in global oil supply chains.
Traders also remained on edge over looming U.S. tariffs under President Donald Trump. The administration is preparing to notify various countries of their individualized tariff rates, stoking fears of broader trade disruptions that could affect global oil flows. While Trump hinted at potential deals with China and the EU, markets continue to anticipate volatility amid tariff uncertainty.
Adding bullish sentiment, the latest U.S. inventory data showed a 3.9 million barrel drop in crude stocks last week—far exceeding analyst expectations. This follows last week’s IEA report which stated that recent supply increases have not resulted in rising inventories, suggesting robust underlying demand.
Weather-wise, a tropical disturbance in the Gulf of Mexico was being monitored but was not expected to strengthen significantly before moving inland in Louisiana, limiting any near-term supply disruption from the U.S. Gulf Coast.