Oil prices edged higher on Thursday as investors weighed the impact of escalating military tensions between the United States and Iran on global energy supplies and prospects for peace in the Middle East.
Brent crude futures rose 53 cents, or 0.68 per cent, to $78.55 a barrel by 1148 GMT, while U.S. West Texas Intermediate crude gained 39 cents, or 0.53 per cent, to $73.91 a barrel.
Both benchmarks reached their highest levels since June 22 during Wednesday’s trading session.
The gains followed fresh military exchanges after the U.S. launched strikes on Iran, prompting retaliatory attacks by Tehran on American military assets in Kuwait and Bahrain.
Analysts said uncertainty surrounding the conflict has continued to support oil prices.
“Generally, it’s a very nervous market. Any news that dampens the prospect of a peace deal is adding a bit to the market,” Saxo Bank analyst Ole Hansen said.
Iranian forces targeted U.S. military infrastructure in neighbouring Gulf states on Thursday after American strikes on Iran’s southern coastal and eastern provinces, further straining a ceasefire agreement that has been in place for three weeks.
The renewed hostilities have also raised concerns over shipping through the Strait of Hormuz, a vital global energy route.
Insurance industry sources said some war-risk underwriters have advised shipping companies to suspend voyages through the waterway, while others are reviewing policy terms following renewed attacks on vessels.
Before the latest escalation, oil prices had been under pressure as markets anticipated increased Middle Eastern supply following a fragile ceasefire and signs of rising crude inventories.
Prior to the conflict, around one-fifth of global oil and liquefied natural gas supplies passed through the Strait of Hormuz, making the waterway a key strategic asset in the crisis.
Investment bank Goldman Sachs said oil market risks remain balanced, noting that supply could recover by the end of July if diplomatic negotiations resume, sanctions waivers on Iranian oil are restored and shipping companies receive security assurances.
The bank warned that failed negotiations, additional attacks on oil tankers or further restrictions on Iranian exports could lead to renewed supply disruptions.
“In the base case, Brent probably trades in a $75–$85 range over the next month, with a mild upward bias,” said Aneeka Gupta, Director of Macroeconomic Research at WisdomTree.
“The underlying supply recovery is real but incomplete, the surplus narrative is discredited for now, and diplomatic engagement, while stalled, hasn’t collapsed entirely.”
Meanwhile, Russia announced a ban on diesel exports on Wednesday to stabilise its domestic fuel market following refinery disruptions caused by Ukrainian drone attacks, which have contributed to fuel shortages and higher prices.
Ojo Triumph
Follow us on:
