Oil Prices Rise 4% as Middle East War, Hurricane Disrupt Supply

By Adedapo Adesanya

Oil prices settled 4 per cent higher on Thursday on renewed concerns about the ongoing war in the Middle East ‌and growing supply disruptions due to a hurricane approaching the US Gulf Coast.

Brent crude futures soared by $4.08 or 4.1 per cent to $104.28 per barrel, while US West Texas Intermediate crude rose 3.6 per cent or $3.21 to $91.49 a barrel.

Worries about fresh attacks had pushed prices high, even as US President Donald Trump said his country was having productive discussions with Iran, and vowed not to attack ⁠the nation until after the November 3 US midterm elections.

Iran ​is also reportedly reviewing the US response to its proposal that would reopen the Strait of Hormuz within seven days, saying it would reply within ​days.

However, the US imposed fresh sanctions on Iran on Thursday, targeting individuals, networks and 17 vessels for transporting Iranian crude, oil products and petrochemicals, the Treasury Department said, in an effort to increase economic pressure on Iran.

The International Energy Agency (IEA) agreed to accelerate the release of oil stocks and prioritise diesel supplies as governments grapple with record fuel prices and war-related supply disruptions.

Threats to oil shipping in the Gulf and the Strait of Hormuz, which ​carried shipments equal to about ​20 per cent of global oil and ⁠fuel before the war, have increased in October as the Iran conflict enters its eighth month.

Attacks on tankers sailing through the strait last week rose to their highest level since the war began, ​even as Gulf producers increased exports.

Analysts suspect Iran may be quietly collecting tolls for safe passage through Hormuz, potentially taking 10 per cent –20 per cent of some cargoes, although the claims remain unverified.

Hurricane Isaias moved toward US offshore production areas, prompting companies to shut platforms. US Gulf of Mexico oil and gas producers have shut in about 1.3 million barrels per day, or 62.9 per cent, ⁠of ​current oil production as of Thursday.

Shell and Chevron said they were curtailing Gulf offshore operations, while BP said it has removed all personnel and shut production at its Na Kika and Thunder Horse ​platforms.