Oil prices rose sharply in early trading Thursday, briefly rising back above the coveted $100/barrel level amid increasing signs of energy market disruptions due to the U.S.-Israel war with Iran.
While crude did temper some gains, amid continued chatter over emergency stockpile releases by major countries, it still remained largely upbeat for the day.
Brent oil futures rose 6.6% to $98.06/barrel by 05:07 ET (09:07 GMT), while West Texas Intermediate crude futures rose 6.1% to $92.61/barrel.
Brent had surged as high as $101.59/barrel earlier in the session.
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Iraq tanker strikes, Oman port evacuation support crude Media reports showed two international oil tankers were attacked in the northern Persian gulf near Iraq and Kuwait. Footage of the event, shared online, showed the tankers engulfed in flames, with Iraqi channels attributing the strike to Iran.
Farhan al-Fartousi, director of Iraq’s General Company for Ports, told The Wall Street Journal that one sailor had been killed and that Iraqi rescue teams were evacuating crew members from the two vessels, which were still burning. He added that Iraq had shut all its oil ports and that fuel had spilled into the sea.
Separately, Bloomberg reported Oman has evacuated all vessels from a key oil export terminal at Mina Al Fahal as a precautionary measure, following a wave of attacks on ships in the region.
Adding to concerns over supply disruptions, Reuters reported that China had immediately banned all exports of refined fuel in March, as it moved to prevent a potential domestic fuel shortage due to the Iran conflict.
The developments showed that disruptions from the Iran conflict were now spilling out beyond just the Strait of Hormuz, as the war entered its thirteenth consecutive day on Thursday.
Attacks on oil tankers and port closures spurred heightened concerns over supply disruptions stemming from the war, especially as Iran warned that no crude will pass through the Strait of Hormuz, a key shipping lane.
The country was seen blocking the passage– which accounts for about 20% of global oil supplies– earlier this week.
ANZ analysts warned in a note that markets were still underpricing the likely duration and disruptions caused by the conflect.
"Once a conflict extends beyond the initial shock phase, oil markets tend to shift from pricing uncertainty to pricing endurance," ANZ analysts said.
"At that point, the key question is no longer whether supply is disrupted, but how long producers can physically sustain output under deteriorating operating conditions."
Oil gains still stalled by emergency release talks Still, oil was kept off its weekly highs as several countries stepped in to offset potential supply shocks. Reports showed the International Energy Agency preparing to release a record 400 million barrels of oil from its strategic reserves this week.
