Oil surges past $105 as Hormuz tanker attacks escalate
Brent crude hit $105.26 and WTI breached $100 after intensified tanker attacks in the Gulf, with Houthis seizing Yemen's Mocha port.
Oil prices climbed sharply on Thursday, with Brent crude touching $105 a barrel, after a fresh wave of attacks on shipping in the Middle East deepened concerns about supply disruptions.
Brent futures were up $4.05, or 4%, at $105.26 a barrel by mid-morning in London. U.S. West Texas Intermediate crude rose $3.99, or 4.15%, to $100.04, crossing the $100 mark for the first time since May 21.
The rally extends a recovery of more than 30% from lows seen in early August, as a lasting agreement between the United States and Iran to halt attacks failed to take hold and fighting resumed.
Iran-aligned Houthis seized control of Yemen's port of Mocha on Thursday, adding to risks for Red Sea traffic. Movement through the Strait of Hormuz remains restricted, with tanker attacks in the region intensifying in recent days.
"The recent run-up in prices lays bare the market's approach: this conflict will last longer than anticipated even a month ago, let alone at the beginning of the summer," said PVM analyst John Evans. "If oil supply and exports are diminished, the oil balance remains tight and prices remain elevated."
U.S. President Donald Trump warned that Washington may strike Iran's Pickaxe Mountain, near the heavily damaged Natanz uranium enrichment site, and said the war would likely continue beyond November's midterm elections.
Iran said it attacked 10 ships near the Strait of Hormuz on Wednesday, after the U.S. hit five Iranian oil tankers. The Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.
Analysts say the durability of the price rally will depend heavily on China. The world's largest crude importer has stepped up purchases in recent weeks after months of subdued demand, tightening physical crude markets, according to ING analysts.
If Chinese buying continues to recover, it could amplify the impact of any supply disruptions and push prices higher; a pullback in imports could temper gains.
"For months the bearish case rested on soft Chinese demand," said David Jorbenaze, global oil market lead at ICIS.
OPEC lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, its fifth consecutive downward revision. The group's output fell by 640,000 bpd in August, a survey found, as Saudi exports faced new disruptions from the war in Iran and a U.S. blockade cut Iranian shipments.