Oil rises 4% on revived Middle East worries, Hurricane Isaias supply disruption

Oil prices surged 4% on Thursday, driven by renewed worries over the Middle East conflict and potential supply interruptions from Hurricane Isaias approaching the US Gulf Coast. Brent crude futures climbed $4.08, or 4.1%, to $104.28, while West Texas Intermediate crude rose $3.21, or 3.6%, to $91.49. Prices initially jumped over $5 a barrel, reaching Brent's highest since September 29, amid concerns of possible US strikes on Iran and hurricane disruption.

However, prices retreated after Trump's remarks of productive talks with Iran and a vow to avoid attacking until after the US midterm elections.

Tensions escalated as the US imposed fresh sanctions on Iran, targeting individuals, networks, and 17 vessels for transporting Iranian crude, oil products, and petrochemicals. France and Saudi Arabia are exploring options for protecting the Yanbu oil terminal using French military assets. Syria is contemplating providing military aid to Saudi Arabia against the Iran-backed Houthis in Yemen, with defensive or offensive assistance options under consideration.

The Middle East conflict's impact on oil shipping intensified, with attacks on tankers in the Gulf and Strait of Hormuz surging in October. These attacks accounted for about 20% of global oil and fuel shipments before the war. Iranian attacks on ships reached their highest since the conflict began, possibly increasing further, according to energy expert Saul Kavonic.

Hurricane Isaias threatened US offshore production areas, prompting companies to shut platforms. US Gulf of Mexico oil and gas producers curtailed about 1.3 million barrels per day of current oil production, with Shell, Chevron, and BP all making significant adjustments to their operations.