By: Economy Middle east

Oil prices surged on Thursday after Iran intensified strikes on oil and transport infrastructure across the Middle East, heightening concerns over a prolonged conflict and disruptions to crude flows through the Strait of Hormuz.

As of 5:40 GMT, Brent crude futures climbed $8.31, or 9.03 percent, to $100.3 a barrel, while U.S. West Texas Intermediate (WTI) gained $6.94, or 7.95 percent, to $94.19.

Supply disruption fears rise and tensions escalate

This week, Brent surged to $119.50 a barrel on Monday, its highest level since mid-2022, before retreating after U.S. President Donald Trump said the conflict with Iran could end soon.

On Wednesday, a spokesperson for Iran’s military command warned that oil prices could surge to $200 per barrel, saying such an outcome would be driven by deteriorating regional security, which the spokesperson accused the United States of destabilizing.

Attacks on oil tankers and the closure of several ports have intensified fears of supply disruptions from tensions in the region, particularly after Iran warned that no crude shipments would be allowed to pass through the Strait of Hormuz, a key global shipping route.

“Multiple tankers loaded with Iraqi crude are now reported burning in the Persian Gulf off the coast of Basra, engulfed in flames and leaking burning oil into the water. This appears to mark a direct and forceful Iranian response to the IEA’s overnight announcement of a massive strategic reserve release aimed at cooling runaway prices,” said Tony Sycamore, Analyst at IG.

Iran was seen blocking passage through the strait earlier this week. The waterway is responsible for roughly 20 percent of global oil flows, making it one of the world’s most critical energy chokepoints.

“We continue to view near-term spikes as likely capped in the $105 region, while any meaningful dips should still find firm support around the $75 level,” he added.

IEA announces largest-ever oil stock release

On Wednesday, the International Energy Agency (IEA) agreed to release a record 400 million barrels of oil in an effort to ease oil prices that have surged since the U.S.-Israeli war with Iran began. The United States will supply the largest share of the release, contributing 172 million barrels from its Strategic Petroleum Reserve.

The Iran conflict showed little sign of easing, despite repeated assertions from U.S. officials this week that the war could soon come to an end. Oil prices had surged to nearly $120 a barrel earlier in the week amid fears of supply disruptions.

Separately, data released on Wednesday showed U.S. crude inventories rose by a larger-than-expected 3.8 million barrels in the previous week.