Oil prices climbed for a second consecutive session on Thursday as escalating military action between the United States and Iran continued to raise concerns over energy supplies moving through some of the world’s most important shipping lanes.
Brent crude futures gained $1.06, or 1.17%, to $91.80 a barrel by 0812 GMT after earlier falling to an intraday low of $89.02.
U.S. West Texas Intermediate (WTI) crude advanced 39 cents, or 0.46%, to $84.85 a barrel after touching a session low of $83.21.
Military Escalation Keeps Energy Markets on Edge
Tensions remained elevated after the U.S. military announced strikes on dozens of Islamic Revolutionary Guard Corps targets across Iran, including command centres and drone facilities. The operation followed Tehran’s launch of ballistic missiles targeting U.S. forces stationed in the Middle East.
According to U.S. Central Command (CENTCOM), the military operation began at 0000 GMT and concluded at 0200 GMT on Thursday.
“Until safe passage through the Strait of Hormuz is no longer a gamble, the risk premium in oil is not going anywhere — hope for diplomacy is welcome, but the market is pricing the reality of ongoing strikes,” said Tim Waterer, chief market analyst at KCM Trade.
Strait of Hormuz Remains Critical to Global Supply
The Strait of Hormuz, through which roughly one-fifth of global oil and natural gas shipments normally pass, has remained at the centre of market attention since hostilities erupted on February 28.
On Wednesday, the United States and Saudi Arabia jointly targeted Iran-backed paramilitary groups operating in Iraq. It marked the first publicly acknowledged Saudi participation in U.S. air strikes and came in response to drone attacks launched from Iraq against Saudi oil infrastructure.
Despite the ongoing military exchanges, analysts said traders continue to focus primarily on whether oil exports through the region remain uninterrupted and whether diplomatic efforts could eventually ease tensions.
Iran’s Fars news agency reported that a Qatari LNG tanker successfully transited the Iranian-designated shipping route through the Strait of Hormuz after receiving permission from Iranian authorities.
Shipping data from Kpler and LSEG showed that the Al Areesh tanker, which loaded cargo at Qatar’s Ras Laffan terminal between July 4 and July 6, exited the strait overnight on July 29.
Additional Shipping Risks Add to Supply Uncertainty
The conflict has also affected traffic through the Bab el-Mandeb Strait, creating another potential bottleneck for global energy shipments alongside the Strait of Hormuz.
Regional sources told Reuters that Yemen’s Houthi movement is considering introducing transit fees for commercial vessels sailing through the southern Red Sea, one week after announcing a naval blockade targeting Saudi Arabia.
“For Brent to break convincingly above recent highs and sustain a move higher, we would need clearer evidence of prolonged physical disruption — either a sustained reduction in flows through Hormuz or confirmed damage to key energy infrastructure,” Waterer added.
Separately, the Caspian Pipeline Consortium told Russian news agency Interfax that it had suspended crude oil loading operations following a drone attack involving a tanker, adding further uncertainty to global supply.