Brent crude rises 4.1% to $104.28 on Thursday amid Middle East war and hurricane worries
US Gulf producers shut in 1.3 million barrels per day as Hurricane Isaias approaches, while Middle East tensions drive global energy market volatility.
- Brent crude oil prices rose 4.1% to settle at $104.28 per barrel amid market volatility.
- The approach of Hurricane Isaias in the U.S. Gulf Coast caused significant supply disruptions, with energy companies shutting down over 62% of the region's oil production.
- Heightened geopolitical tensions in the Middle East, including concerns over a potential U.S.-Iran conflict and increased attacks on oil tankers, also contributed to the price surge.
Oil prices settled 4% higher on Thursday in Houston as revived concerns over the ongoing Middle East war and growing supply disruptions from Hurricane Isaias approaching the US Gulf Coast drove intense market volatility.
Brent and WTI futures surge amid regional conflict
Brent crude futures closed up $4.08, or 4.1%, at $104.28 per barrel, while US West Texas Intermediate crude rose 3.6%, or $3.21, to $91.49. At one point during the session, both contracts gained more than $5 a barrel, with Brent touching its highest level since September 29 amid worries over potential US strikes on Iran.
Prices later pared gains after US President Donald Trump stated that Washington was engaged in productive discussions with Iran and vowed not to launch attacks until after the November 3 US midterm elections. Meanwhile, Iran's Tasnim news agency reported that Foreign Minister Abbas Araqchi said Tehran is reviewing a US response to its proposal to reopen the Strait of Hormuz within seven days, with a reply expected within days.
US Gulf oil output cut as Hurricane Isaias approaches
Hurricane Isaias moved toward US offshore production areas, forcing energy companies to shut down platforms across the region. US Gulf of Mexico oil and gas producers have shut in about 1.3 million barrels per day, representing 62.9% of current oil production as of Thursday, according to the US Marine Minerals Administration.
On Wednesday, major operators including Shell and Chevron curtailed Gulf offshore operations, while BP removed all personnel and halted production at its Na Kika and Thunder Horse platforms.
Sanctions and international diplomatic responses
The United States imposed fresh economic sanctions on Iran on Thursday, targeting individuals, networks, and 17 vessels involved in transporting Iranian crude, oil products, and petrochemicals. In Europe and the Middle East, France and Saudi Arabia are studying options involving French military assets to protect the Yanbu oil terminal, according to French Armed Forces Chief of Staff General Fabien Mandon.
Additionally, Syria is considering military assistance for Saudi Arabia in its conflict with the Iran-backed Houthis in Yemen, as reported by US and Syrian military officials.
Shipping threats and IEA stock release
Threats to oil shipping in the Gulf and the Strait of Hormuz—which carried shipments equal to about 20% of global oil and fuel before the war—have intensified as the Iran conflict enters its eighth month. Attacks on tankers sailing through the strait last week reached their highest level since the war began, even as Gulf producers increased crude exports.
Saul Kavonic, MST Marquee head of energy, noted that the frequency of Iranian attacks on ships is at its highest point and likely to intensify further. This follows Wednesday's agreement by the International Energy Agency to accelerate the release of oil stocks and prioritize diesel supplies as governments grapple with record fuel prices.
