Oil prices rose sharply on Thursday as traders weighed intensifying Persian Gulf shipping risks and U.S.-Iran tensions alongside U.S. offshore production shut-ins ahead of Hurricane Isaias.
December Brent crude futures rose 4.1% to $104.28 a barrel, and West Texas Intermediate for November delivery settled up 3.6% at $91.49 a barrel.
The latest rise reflects a combination of Middle East and U.S. supply risks, DNB Carnegie energy analyst Helge Andre Martinsen said. He pointed to a tanker attack off Qatar, Houthi attacks on Saudi airports, reports of possible renewed U.S. strikes against Iran and temporary Gulf of Mexico production shutdowns ahead of Hurricane Isaias.
Attacks from Houthi militants escalated in Saudi Arabia this week, The Wall Street Journal reported, while Saudi-led coalition forces destroyed Houthi military targets. Shipping risks in the Persian Gulf remain elevated.
Early concerns that the U.S. could be preparing military strikes against Iran before the midterm elections were scotched with President Trump denying it in a Truth Social Post. He said the U.S. is having productive discussions with Iran, which is "in very bad condition, both economically and militarily," and that the U.S. blockade will remain in full force.
"We will not be attacking Iran at any time prior to the midterm elections to be held in the United States on November 3rd," Trump added.
Oil prices were also buoyed by U.S. Gulf producers such as Chevron, Shell and Harbour Energy evacuating platforms with Hurricane Isaias set to reach the U.S. Gulf coast late Friday. The U.S. Marine Minerals Administration said 121 platforms and five rigs had been evacuated as of 12 p.m. ET Thursday, shutting in 1.28 million barrels a day of crude oil and over 1.1 billion cubic feet a day of natural gas production. The shut-ins are equivalent to 63% of U.S. Gulf oil production and 57% of offshore natural gas production.
The International Energy Agency said Wednesday that member countries supported accelerating the remaining emergency oil-stock releases pledged in March and prioritizing diesel where possible. Around 325 million barrels have already been released, while completing outstanding pledges would bring roughly another 100 million barrels to market, the agency said.