He added that restricted fuel flows, exceptionally high logistics costs and the risk of further Iranian escalation were keeping oil prices elevated.

SINGAPORE: Global oil prices rose on Thursday as concerns over supply disruptions in the Middle East intensified following increased attacks on shipping in the Gulf and the Strait of Hormuz, while a hurricane approaching US offshore production areas forced energy companies to curtail output.

Brent crude futures climbed $2.28, or 2.28%, to $102.28 per barrel by 0427 GMT. US West Texas Intermediate (WTI) crude futures gained $1.66, or 1.88%, to $89.94 per barrel.

The gains came after oil prices settled lower on Wednesday, following the International Energy Agency’s (IEA) decision to accelerate the release of oil stocks and prioritise diesel supplies to address elevated fuel prices and supply disruptions linked to the Iran war.

Strait of Hormuz Attacks Raise Supply Concerns

Concerns over the safety of oil shipments through the Gulf and the Strait of Hormuz have intensified as the US-Israeli conflict with Iran enters its eighth month.

Before the war, the strategic waterway handled shipments equivalent to approximately 20% of global oil and fuel supplies, making it a critical route for international energy markets.

Attacks on tankers passing through the Strait of Hormuz reached their highest weekly level since the conflict began last week, as Gulf producers increased exports despite mounting security risks.

The increased attacks have coincided with higher crude shipments from the region, raising transportation costs and risks for cargoes and crew.

In the latest incident, a tanker north of Qatar was struck by multiple projectiles, causing casualties, the United Kingdom Maritime Trade Operations agency said on Wednesday.

Saul Kavonic, head of energy research at MST Marquee, said the frequency of Iranian attacks on ships had reached its highest level since the war began and could intensify further.

He added that restricted fuel flows, exceptionally high logistics costs and the risk of further Iranian escalation were keeping oil prices elevated.

IEA Oil Release May Not Add New Supply

ANZ analyst Daniel Hynes said the IEA’s latest oil release would likely include barrels already covered by the group’s original 400-million-barrel release plan introduced at the beginning of the Middle East conflict.

This suggests the latest move may not represent an additional drawdown of strategic inventories beyond the existing plan.

Hynes said strategic stock releases could temporarily increase available supplies but would not create new production capacity.

The intervention is intended to ease immediate market pressures as governments seek to contain fuel costs and address disruptions caused by the conflict.

Hurricane Forces US Offshore Producers to Cut Output

Oil prices also gained support from production cuts in the United States as Hurricane Isaias approached offshore energy facilities in the Gulf of Mexico.

Shell and Chevron said on Wednesday they were curtailing offshore operations in response to the approaching storm.

According to the Marine Minerals Administration, US Gulf of Mexico producers had shut in approximately 25.08% of current oil production and 16.37% of natural gas production as of Wednesday.

The United States is the world’s largest oil producer, making disruptions to its offshore operations another source of uncertainty for global energy markets.

US Crude Inventories Fall More Than Expected

Fresh US inventory data also supported oil prices, with crude stockpiles declining more sharply than analysts had anticipated.

The US Energy Information Administration reported that crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended October 2.

Analysts surveyed by Reuters had expected a decline of 1.7 million barrels.

Distillate fuel inventories, which include diesel and jet fuel, fell by 42,000 barrels to 105.14 million barrels. Stocks remained well below levels typically recorded at this time of year over the previous five years.

The combination of geopolitical tensions, hurricane-related production cuts and falling US inventories continued to support oil prices despite efforts to release strategic stocks and ease supply pressures.