Oil prices climbed sharply early Thursday, briefly pushing back above the key $100-per-barrel threshold as fresh signs of disruption in energy markets emerged amid the ongoing U.S.-Israel conflict with Iran.
Although crude later gave up part of its gains following continued discussion about emergency stockpile releases by major economies, prices still remained firmly higher on the day.
Brent crude futures advanced 6.6% to $98.06 per barrel by 05:07 ET (09:07 GMT), while U.S. West Texas Intermediate futures rose 6.1% to $92.61 per barrel.
Earlier in the session, Brent had climbed as high as $101.59 per barrel.
Tanker attacks near Iraq, Oman port evacuation support oil prices
Media reports indicated that two international oil tankers were struck in the northern Persian Gulf near Iraq and Kuwait. Video circulating online showed the vessels engulfed in flames, with Iraqi media attributing the attack to Iran.
Farhan al-Fartousi, director of Iraq’s General Company for Ports, told The Wall Street Journal that one sailor had been killed and that Iraqi rescue teams were evacuating crew members from the two vessels, which were still burning. He added that Iraq had shut all its oil ports and that fuel had spilled into the sea.
Separately, Bloomberg reported that Oman had evacuated all vessels from a major oil export terminal at Mina Al Fahal as a precaution following a wave of ship attacks across the region.
Concerns over supply disruptions were further amplified by a Reuters report stating that China had immediately halted all exports of refined fuel in March as it sought to avoid a potential domestic fuel shortage linked to the Iran conflict.
These developments suggest that disruptions tied to the war with Iran are now spreading beyond the Strait of Hormuz, as the conflict entered its thirteenth day on Thursday.
Attacks on oil tankers and the closure of ports have intensified fears of supply interruptions resulting from the conflict, particularly after Iran warned that no crude shipments would pass through the Strait of Hormuz, a critical global shipping route.
The country was seen blocking the waterway earlier this week — a passage responsible for roughly 20% of global oil supply.
ANZ analysts warned in a note that markets may still be underestimating both the duration of the conflict and the extent of potential disruptions.
“Once a conflict extends beyond the initial shock phase, oil markets tend to shift from pricing uncertainty to pricing endurance,” ANZ analysts said.
“At that point, the key question is no longer whether supply
is disrupted, but how long producers can physically sustain output under deteriorating operating conditions.”
Emergency reserve releases cap oil gains
Even so, crude prices remained below their weekly peaks as several governments moved to cushion potential supply shocks.
Reports indicated that the International Energy Agency is preparing to release a record 400 million barrels of oil from strategic reserves this week.
U.S. President Donald Trump also announced on Wednesday that the United States would release 172 million barrels from the Strategic Petroleum Reserve in an effort to ease the energy shock caused by the Iran conflict.
Despite these measures, the conflict involving Iran showed few signs of easing, even as U.S. officials continued to suggest that the war could soon be nearing an end.
Earlier this week, oil prices had surged to nearly $120 per barrel.
Separately, data released on Wednesday showed that U.S. crude inventories increased by 3.8 million barrels in the previous week, a larger-than-expected build.