Oil prices surged on Thursday as renewed attacks on critical energy infrastructure in the Middle East heightened fears of supply disruptions tied to the expanding U.S.–Israel confrontation with Iran. The latest strikes have widened concerns beyond the Strait of Hormuz, exposing broader vulnerabilities in global energy supply chains.
Brent crude futures climbed 8.4% to $116.35 per barrel by 05:07 ET (09:07 GMT), while U.S. West Texas Intermediate futures rose 1.4% to $97.64 per barrel, briefly touching $100.02 during the session.
Prices were also supported by a Reuters report indicating that the United States was considering deploying thousands of troops to the Middle East, raising market concerns about the scale and implications of a potential ground operation against Iran.
Analysts at Jefferies expect tensions to intensify further in the coming weeks, although they believe both sides may first attempt to exploit each other’s strategic weaknesses before ultimately shifting toward negotiations from a position of strength.
“A realistic scenario would be that the US puts boots on the ground to take over the Kharg island and force Iran into negotiations,” Jefferies’ Mohit Kumar said in a note.
Oil rally continues after attacks on energy facilities
Oil extended its strong gains from the previous session after reports indicated that Israel had targeted infrastructure at Iran’s South Pars field, the largest natural gas field in the world.
Iran responded with retaliatory strikes on energy installations in Qatar, the United Arab Emirates and Saudi Arabia.
Tehran had previously warned it could target several major energy assets in the region, including Saudi Arabia’s SAMREF and Jubail complexes, the United Arab Emirates’ Al Hisn gas field and Qatar’s Ras Laffan refinery.
U.S. President Donald Trump stated in a strongly worded social media message that Washington had not been informed of Israel’s strike on South Pars and cautioned Iran against further retaliation.
Trump added that Israel would not attack South Pars again and warned that the United States would “massively blow up” the gas field if Iran carried out additional retaliatory strikes.
Supply concerns remain elevated amid ongoing conflict
The possibility of further attacks on oil and gas facilities across the Middle East has intensified concerns about supply disruptions stemming from the Iran conflict, particularly as Tehran continues to restrict access through the Strait of Hormuz, a vital route for global oil shipments.
Reuters reported late Wednesday that the Trump administration was weighing the deployment of thousands of troops to the region, with one objective potentially being to secure safe passage for oil tankers through the Strait of Hormuz.
According to the report, Washington was also considering sending troops to Iran’s Kharg Island after targeting military installations near the oil export hub last week.
“With the US–Iran confrontation now in its third week, there is still no credible path to de‐escalation. Vessel traffic through the Strait of Hormuz remains severely restricted,” OCBC analysts said in a note.
“Prolonged shipping paralysis is forcing Gulf producers into output shut‐ins, heightening the risk that temporary disruptions evolve into more persistent supply losses.”
Oil prices rose despite a stronger U.S. dollar and growing concerns that higher energy costs could lead to a more hawkish stance from global central banks. The Federal Reserve on Wednesday warned of uncertainty surrounding energy-driven inflation, while U.S. producer price data came in above expectations.
Crude prices also moved higher despite figures showing an unexpected weekly increase in U.S. oil inventories.
Earlier in the week, oil’s rally had briefly paused after reports that Iraqi and Kurdish authorities had reached an agreement to restart oil flows through Turkey’s Ceyhan export terminal. Major economies were also considering releasing oil from strategic reserves to offset supply disruptions caused by the Iran conflict.