Oil prices rebounded on Thursday, with Brent crude rising more than $3 per barrel as renewed attacks on oil tankers in the Middle East heightened concerns over supply disruptions. Brent crude futures gained $3.67, or 3.88%, to settle at $98.29 a barrel, while U.S. West Texas Intermediate (WTI) crude increased $2.40, or 2.72%, to $90.52 a barrel. The gains reversed much of Wednesday’s decline, when both benchmarks fell more than 8% to their lowest settlement levels since August 31.<\/p>\n\n\n\n
Renewed attacks on commercial vessels and uncertainty surrounding diplomatic efforts between the United States and Iran have kept traders cautious about expectations for a quick recovery in oil shipments. At least five vessels have reported incidents in the Gulf since Sunday, according to the UK Maritime Trade Operations (UKMTO). The agency reported 35 vessel incidents in October, the highest monthly total since the conflict began. Concerns over mines, drone attacks and continued restrictions on shipping through the Strait of Hormuz remain a major source of upward pressure on prices.<\/p>\n\n\n\n
Uncertainty surrounding the conflict remains elevated despite ongoing diplomatic efforts. Eurasia Group lowered its estimate for renewed U.S. strikes on Iran to 60% from 65%, while reducing the probability of a negotiated agreement to 10% from 20%. The firm increased its outlook for a prolonged standoff to 30% from 15%, citing Iran’s continued demands and the difficulty of reaching an agreement. Eurasia Group also warned that a further escalation could push Brent crude prices into a range of $110 to $125 per barrel.<\/p>\n\n\n\n
Regional tensions continued to spread, with Saudi Arabia issuing warnings of potential threats to its Yanbu oil export hub as Houthi attacks continued. Iran’s Revolutionary Guard also reported that two oil tankers and a tugboat caught fire in separate incidents involving vessels attempting to navigate unauthorized routes through the Strait of Hormuz. Meanwhile, Iran’s foreign minister held separate discussions with Saudi and Qatari officials regarding diplomatic efforts to promote regional stability.<\/p>\n\n\n\n
Additional supply concerns emerged from renewed Ukrainian attacks on Russian oil infrastructure. A drone attack appeared to target the Ryazan refinery, one of Russia’s largest, following an earlier attack on the Yaroslavl refinery. Further damage to Russian refining capacity could create additional uncertainty surrounding the country’s diesel production and export availability.<\/p>\n\n\n\n