Brent sits above $102 as Mideast strikes dent hopes for renewed Hormuz shipping

Oil prices climbed on Thursday, surpassing the $100 per barrel mark as a result of renewed U.S.-Iran military action spurring concerns over energy supply routes in the Middle East. Brent oil futures increased by 1.1% to $102.30 a barrel, while U.S. West Texas Intermediate crude futures rose by 1.6% to $97.57 a barrel. The surge came after the U.S. and Iran exchanged their most severe strikes on shipping since the conflict began in February, reigniting hostilities between the two nations after a tense pause in much of August.

Iran reported striking 10 ships in and near the Strait of Hormuz on Wednesday, while the U.S. claimed it had struck back by sinking five Iranian oil tankers. Despite the strait carrying only a fraction of pre-war flows, markets remained apprehensive about possible ongoing energy supply disruptions stemming from the conflict. This week, Yemen's Iran-backed Houthi group targeted Saudi Arabian energy facilities, adding to worries over vessel traffic in the Bab al-Mandeb Strait, another critical shipping route serving major Gulf oil exporters like Saudi Arabia.

Analysts from ANZ warned that the escalating conflict could keep oil flows from the Persian Gulf disrupted for an indefinite period, further threatening the oil market which has already been grappling with readjustments. U.S. President Donald Trump had stated that the Iran war would conclude following the November mid-term elections; however, according to a Wall Street Journal report, Trump's top advisors have cautioned that the conflict may persist until the end of Trump's term, which is set to conclude in January 2029.