LONDON: Oil rose by over 4% on Thursday, rebounding from the previous session’s losses, as prospects for a prolonged conflict in the Middle East stoked concerns over further supply disruptions.
Brent futures rose $4.77, or 4.7%, to $106.99 a barrel by 1220 GMT, after hitting a session high of $107.84. U.S. West Texas Intermediate crude futures gained $3.74, or 4.1%, to $94.06 a barrel, after rising to as much as $94.84.
Both benchmarks slumped more than 2% on Wednesday.
“Current concern is a further escalation of the conflict and flows through the Strait (of Hormuz) remaining restricted for longer,” UBS analyst Giovanni Staunovo said.
Iran is reviewing a U.S. proposal to end the war, but has no intention of holding talks to end the conflict, Iran’s foreign minister said on Wednesday.
U.S. President Donald Trump will hit Iran harder if Tehran fails to accept that the country has been “defeated militarily,” White House press secretary Karoline Leavitt said.
The Pentagon is planning to send thousands of airborne troops to the Gulf to give Trump more options for a ground assault, sources have told Reuters, adding to two Marine contingents already en route.
China’s Sinopec will not buy Iranian oil, wants to tap state reserves
“Ongoing military escalation, including troops deployments and fresh strikes, alongside limited tanker movement under strict Iranian conditions, continues to strain global energy markets,” MUFG analyst Soojin Kim said.
Trump’s 15-point plan
Trump’s 15-point proposal, sent through Pakistan, would remove Iran’s stocks of highly enriched uranium, halt enrichment, curb its ballistic missile program and cut funding for regional allies, three Israeli cabinet sources familiar with the plan said.
The conflict has nearly halted shipments through the Strait of Hormuz, which typically carries about a fifth of the world’s crude oil and LNG supply, in what the International Energy Agency has called the biggest oil supply disruption ever.
Japanese Prime Minister Sanae Takaichi asked IEA chief Fatih Birol for an additional coordinated release of oil stockpiles on Wednesday, as Tokyo seeks to hedge against a prolonged conflict.
Removing sanctions on Iran oil will bring supplies into ports, US energy secretary says
Adding to supply concerns, at least 40% of Russia’s oil export capacity is at a halt following Ukrainian drone attacks and the seizure of tankers, according to Reuters calculations based on market data.
Turkey’s transportation minister said on Thursday a marine drone struck a Turkish crude oil tanker that departed Russia, causing an explosion near Istanbul’s Bosphorus.
Iraqi oil production has slumped, with storage tanks reaching high and critical levels, three Iraqi energy officials said on Wednesday.
U.S. crude inventories rose by 6.9 million barrels to 456.2 million barrels in the week ended March 20, the highest since June 2024 and far exceeding analyst expectations.
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