Oil prices continued to rise sharply on Thursday as the war in the Middle East entered its sixth day, raising serious concerns about global oil supply.
Brent crude futures climbed 2.6% to $83.54 per barrel, while US West Texas Intermediate (WTI) crude rose 3.1% to $76.96 per barrel. Both benchmarks marked their fifth straight day of gains. Brent is now trading close to its highest level since July 2024.
Strait of Hormuz in Focus
The conflict began when the United States and Israel launched coordinated strikes on Iran. Fighting has since expanded, including a US naval strike that sank an Iranian warship near Sri Lanka. The situation has increased fears of wider regional instability.
The biggest concern for oil markets is Iran’s move to effectively close the Strait of Hormuz. This narrow waterway is one of the world’s most important oil transit routes. Nearly 20% of global oil shipments pass through it. Any disruption can quickly push prices higher.
Iraq, the second-largest oil producer in OPEC, has already declared force majeure on some crude exports due to shipping disruptions. Reports say Iraq has reduced output by nearly 1.5 million barrels per day because it lacks storage and safe export routes.
Analysts warn that if the Strait of Hormuz is fully blocked, Brent crude could surge as high as $140 per barrel. However, experts believe a long-term total blockage is unlikely, as it would trigger a strong international response. Partial disruptions could still push prices toward $100 before stabilizing.
US Stockpiles Rise
Meanwhile, data from the American Petroleum Institute showed that US crude inventories increased by 5.6 million barrels last week. This was higher than market expectations but lower than the previous week’s rise.
Traders are now waiting for official inventory data from the US Energy Information Administration for further direction.
