Oil prices jump over 3% on Thursday

Oil prices climbed more than 3 per cent on Thursday, extending gains for a fifth straight session as the escalating war between the United States, Israel and Iran heightened fears of prolonged disruptions to Middle East oil and gas supplies.

Brent crude rose $2.44, or 3 per cent, to $83.84 per barrel by 0722 GMT, while US West Texas Intermediate gained $2.44, or 3.27 per cent, to $77.10. Markets remained on edge amid mounting risks to supply, particularly around trade flows through the Strait of Hormuz.

Iran launched a fresh wave of missiles at Israel early on Thursday as the conflict entered its sixth day. On Wednesday, a US submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, while NATO air defences intercepted an Iranian ballistic missile fired towards Turkey. Iranian forces also struck oil tankers in or near Hormuz, and explosions were reported near a tanker off Kuwait, according to the United Kingdom Maritime Trade Operations.

Iraq, the second-largest crude producer in the Organisation of the Petroleum Exporting Countries, cut output by nearly 1.5 million barrels per day due to storage and export constraints. Qatar, the Gulf’s largest liquefied natural gas producer, declared force majeure on gas exports, with sources indicating that normal production may take at least a month to resume.

At least 200 vessels, including oil and LNG tankers, remained anchored off major Gulf producers such as Iraq, Saudi Arabia, and Qatar, according to ship-tracking data from MarineTraffic. Hundreds more ships were stranded outside Hormuz, a critical waterway that handles around one-fifth of global oil and LNG supplies.

China’s government asked companies to suspend new refined fuel export contracts and seek to cancel existing shipments, industry and trade sources said.

Attribution: Reuters