Oil prices surged on Thursday as renewed concerns over the war in the Middle East combined with growing disruptions to U.S. Gulf oil production from Hurricane Isaias. Both major crude benchmarks gained more than 3%, with prices reaching their highest levels in more than a week before easing from their session highs.<\/p>\n\n\n\n
Brent crude futures rose $4.08, or 4.1%, to settle at $104.28 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $3.21, or 3.6%, to settle at $91.49 a barrel.<\/p>\n\n\n\n
Oil prices were supported by renewed concerns that the conflict with Iran could lead to additional supply and shipping disruptions. Prices pulled back from their highs after President Trump said the U.S. was having productive discussions with Iran and would not attack the country before the November 3 midterm elections. Iran is also reviewing a U.S. proposal concerning the Strait of Hormuz, which could potentially reopen the key shipping route within seven days.<\/p>\n\n\n\n
Despite the possibility of renewed negotiations, the U.S. imposed additional sanctions on Iran targeting individuals, networks and 17 vessels involved in transporting Iranian crude, petroleum products and petrochemicals. Tensions also remain elevated around Saudi Arabia, with France and Saudi Arabia examining options to protect the Yanbu oil terminal as fighting involving Iran-backed Houthi forces continues.<\/p>\n\n\n\n
Supply concerns remain particularly focused on the Strait of Hormuz, where tanker attacks increased last week to their highest level since the war began. The waterway normally handles shipments equivalent to approximately 20% of global oil and fuel supplies, making continued disruptions a significant risk for the global market.<\/p>\n\n\n\n
The market is also dealing with a major weather-related disruption in the United States. Hurricane Isaias is approaching the U.S. Gulf Coast and has already forced energy companies to shut in approximately 1.3 million barrels per day of crude oil production, representing about 62.9% of current Gulf of Mexico output.<\/p>\n\n\n\n
With Middle Eastern supply and shipping already under pressure, the loss of additional U.S. production has added another layer of uncertainty to the crude market and helped push prices sharply higher on Thursday.<\/p>\n\n\n\n