By: Economy Middle East

Oil prices extended gains for a fourth consecutive session on Thursday before easing slightly as fresh U.S. strikes on Iranian military targets intensified concerns over a renewed escalation in the conflict and potential disruptions to oil shipments through the Strait of Hormuz.

Brent crude futures rose to $85.28 a barrel before easing 0.31 percent to $84.69 as of 4:10 GMT, while U.S. West Texas Intermediate (WTI) crude rose to $80.02 a barrel before falling 0.14 percent to $79.49.

Concerns over supply disruptions keep oil prices higher

Oil prices advanced around 0.3 percent in the previous session and remained close to the one-month highs reached on Tuesday, supported by persistent geopolitical tensions and concerns over potential supply disruptions.

The United States targeted Iran’s coastal defense systems and missile facilities on Wednesday after reinstating a naval blockade on Iranian ports. In response, Tehran warned it could curb additional regional energy exports, declaring that it was fighting an existential war against the United States.

Oil prices have posted steady gains this week as escalating attacks intensified supply disruptions in the Strait of Hormuz, a key maritime chokepoint that accounted for roughly one-fifth of global oil and liquefied natural gas shipments before the conflict erupted.

Tensions between the United States and Iran flared up again last week, undermining the fragile ceasefire reached in June after months of hostilities.

Analysts said Iran has indicated it could leverage its Houthi allies in Yemen to target the Bab el-Mandeb Strait, potentially disrupting traffic through another critical global shipping route. Such a move would open a new front in the conflict with Washington and place two of the world’s most strategically important energy corridors under heightened threat.

Brent crude to surge above $110 if disruptions continue

Goldman Sachs said Brent crude could climb above $110 a barrel in the fourth quarter if disruptions to Gulf exports persist. However, the bank expects prices could retreat into the $60 range by year-end if geopolitical tensions subside and oil production rebounds more quickly than anticipated.

On the supply front, the U.S. Energy Information Administration reported that crude oil inventories declined by 1.7 million barrels in the week ended July 10, compared with analysts’ expectations for a larger draw of 2.6 million barrels.

U.S. gasoline inventories fell by 1.5 million barrels, reflecting resilient fuel demand during the peak summer driving season. In contrast, distillate stockpiles unexpectedly increased by 4.6 million barrels.

Meanwhile, the International Energy Agency said in its July oil market report that although oil shipments through the Strait of Hormuz partially recovered in June, the resurgence of hostilities this month has heightened uncertainty over the market outlook and could delay expectations of a return to an oil surplus in 2027.