Oil prices jumped again on Thursday, building on recent gains as the conflict in the Middle East entered its sixth day without signs of easing, increasing concerns about potential supply disruptions from one of the world’s most important oil-producing regions.
At 03:35 ET (08:35 GMT), Brent crude futures for May delivery rose 2.6% to $83.54 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed 3.1% to $76.96 per barrel.
Both crude benchmarks are now on track for a fifth straight session of gains, with Brent trading just below its highest level since July 2024.
Middle East conflict, Strait of Hormuz risks in focus
The Middle East conflict, which erupted over the weekend when the United States and Israel launched coordinated strikes against Iran, continues to escalate with no clear resolution in sight. The situation intensified after the U.S. sank an Iranian warship near Sri Lanka in international waters, highlighting the expanding scope of the confrontation.
On Wednesday, the U.S. Senate rejected a proposal—largely along party lines—that sought to halt the air campaign and require congressional authorization for military operations.
Meanwhile, Tehran dismissed a report claiming that Iran’s Ministry of Intelligence had contacted Washington to negotiate an end to the fighting, calling it “pure falsehood” and accusing Western media outlets of spreading misinformation. The denial dampened hopes for a near-term diplomatic solution.
Concerns about supply have grown after Iran effectively shut the Strait of Hormuz, one of the world’s most critical oil transit routes through which roughly one-fifth of global crude shipments pass.
The disruption is already affecting producers in the region. Reports indicated that Iraq declared force majeure on some crude exports as shipments through the Strait of Hormuz were severely disrupted.
Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries, has reduced output by nearly 1.5 million barrels per day due to limited storage capacity and restricted export routes, officials told Reuters.
“Successfully blocking the Strait of Hormuz would leave significant upside to the market, potentially with Brent hitting $140/bbl, with supply losses unable to be offset,” said analysts at ING in a note. “However, a full and prolonged blockage of the strait would likely be unsuccessful, with any attempts to do so leading to a rapid response. Partial disruptions, which could include seizing or attacking tankers, would likely mean Brent spikes towards $100/bbl initially but settles in a largely $80-90/bbl range.”
U.S. crude inventories rise more than expected – API
Data released by the American Petroleum Institute (API) showed that U.S. crude inventories increased by about 5.6 million barrels during the week ended Feb. 28, well above expectations for a build of roughly 2.2 million barrels, although still significantly lower than the previous week’s increase of 11.4 million barrels.
Market participants are now waiting for the official stockpile figures from the U.S. Energy Information Administration (EIA), which are scheduled to be released later on Thursday to confirm the build.