Oil Prices Surge on Renewed Iran Tensions, Reaching Highest Since July

Oil futures climbed to their strongest levels in three weeks on Thursday, as market participants weighed the risk that the ongoing standoff in the Middle East could further curtail supplies from the region. Brent crude for October delivery rose $2.44, or 2.7%, to $94.06 a barrel by 0958 GMT, while U.S. West Texas Intermediate (WTI) for September increased $1.84 to $87.67. The more heavily traded October WTI contract also gained $2.41, or 2.9%, to $86.80. Both benchmarks hit their highest points since July 24, marking a fifth straight day of gains.

UBS analyst Giovanni Staunovo highlighted that elevated Middle East tensions still leave room for additional supply disruptions, noting that reduced crude exports from the region are tightening market dynamics. Meanwhile, the United Arab Emirates’ decision to suspend all financial and economic ties with Iran has further underscored the strained relationship between the Gulf’s largest oil producer and Tehran.

Nissan Securities Investment chief strategist Hiroyuki Kikukawa said prices remain elevated because the market is underpinned by intermittent attacks in the region, though it lacks fresh momentum without a significant escalation. He expects a gradual upward trajectory amid uncertainty over peace negotiations and tensions involving the UAE, Oman, and Iran.

On Tuesday, U.S. President Donald Trump stated that no talks were underway with Iran and that the Strait of Hormuz remained open, while Iran insisted the waterway was closed. The next day, Trump warned of economic repercussions for any nation offering support to Iran.

Shipping movements through the Strait of Hormuz on Wednesday were unchanged from the previous day, reflecting stalled efforts to resolve the conflict. Before the hostilities began with U.S. and Israeli strikes on February 28, roughly one‑fifth of global oil consumption passed through the strait each day; current volumes are well below pre‑war levels.

The conflict has also disrupted refined fuel supplies, reducing inventories as refiners have less crude available. U.S. distillate stockpiles, which include diesel and heating oil, fell for a third straight week, according to the Energy Information Administration, while crude inventories unexpectedly rose by 4.4 million barrels.