Oil prices surge amid Mideast shipping attacks, U.S. Gulf coast disruptions

Oil prices surged on Thursday after reports of additional attacks on commercial shipping in the Middle East. Brent crude futures increased by 3.9% to $104.07 a barrel, while U.S. West Texas Intermediate crude futures for November rose 3.7% to $91.53 a barrel, according to Reuters. The Strait of Hormuz witnessed a drop in vessel transits to a two-month low due to heightened Iranian attacks on tankers, according to shipping data from Kpler.

Iran has intensified its attacks on shipping in Hormuz over the past week, with Tehran stating the waterway remained closed amidst an ongoing dispute with the United States.

A tanker was struck by multiple projectiles near Qatar on Wednesday, resulting in casualties, as reported by the UK Maritime Trade Operations body. Iranian attacks on tankers reached their highest level in any week since the U.S.-Iran war started, occurring shortly after shipping through Hormuz briefly returned to pre-war levels in September.

The Pentagon instructed U.S. Central Command to prepare for possible resumption of major combat operations against Iran, though President Donald Trump had not yet decided on the timing of potential strikes.

The situation in the Middle East poses a risk of further disruptions in oil supplies, particularly in Hormuz and Red Sea shipping, as well as Saudi Arabia’s oil exports. Hostilities between Saudi Arabia and Yemen’s Iran-backed Houthis persisted, with Houthis attacking a refinery in Riyadh. U.S. Gulf coast production is a concern as Tropical Storm Isaias approaches, forecasting to rapidly strengthen into a hurricane by the weekend and potentially bring intense rainfall and hurricane-force winds to the Gulf of Mexico.

Major oil and gas companies, including BP, Chevron, and Shell, evacuated non-essential personnel from offshore facilities in the region, with up to 11.2 million barrels of oil production potentially lost due to the storm.