Global oil prices jumped sharply on Thursday as Iran intensified attacks on oil and transport infrastructure across the Middle East, raising concerns over prolonged conflict and potential disruptions to supplies through the Strait of Hormuz.
Brent crude futures climbed $5.95, or 6.47%, to $97.93 a barrel by 09:15 GMT, briefly reaching $100 per barrel in earlier trading. US West Texas Intermediate crude rose $5.25, or 6%, to $92.50 a barrel.
Brent had earlier hit $119.50 per barrel on Monday, its highest level since mid-2022, before falling after US President Donald Trump suggested the Iran conflict could end soon.
The International Energy Agency (IEA) described the ongoing war as the largest oil-supply disruption in global market history. On Wednesday, the agency approved the release of a record 400 million barrels from strategic reserves to help stabilise markets.
IEA analysts said Gulf nations have reduced oil production by at least 10 million barrels per day nearly 10% of global demand as a direct result of the conflict. However, market analysts warned that the IEA release may take months to reach the market. PVM analyst John Evans said the 400 million barrels are expected to be released over roughly 90 days, averaging about 4.5 million barrels per day.
Financial institutions are adjusting forecasts amid the uncertainty. Goldman Sachs projects Brent to average $98 per barrel in March and April before falling to $71 by the fourth quarter. In a scenario where shipping through the Strait of Hormuz is disrupted for a month, prices could spike to $110 per barrel. Analysts at ING said sustained lower oil prices are only possible if oil flows through the strait are fully restored.
Tensions escalated further after Iranian explosive-laden boats attacked two fuel tankers in Iraqi waters on Wednesday, setting them ablaze and killing one crew member. The attacks followed projectiles striking four vessels in Gulf waters, according to maritime security sources.
Meanwhile, Hezbollah launched its largest rocket salvo of the current conflict on Wednesday night, prompting Israeli strikes in Beirut and raising fears that Yemen’s Houthi rebels could join the conflict to disrupt Middle East shipping further.
On the supply side, China has ordered an immediate ban on refined fuel exports for March to prevent a potential domestic shortage caused by the US-Israeli war on Iran, according to sources.
The combination of heightened attacks, production cuts, and restricted exports has sent shockwaves through global oil markets, keeping prices at elevated levels as traders weigh the risk of continued instability in the region.