Oil prices climbed sharply on Thursday as rising attacks on tankers in the Middle East collided with hurricane-related production shutdowns in the US Gulf, reviving fears that supply risks are becoming physical rather than theoretical.
Brent crude rose more than 2% to about $102.28 a barrel, while West Texas Intermediate gained nearly 2% to $89.94.
The rebound came just a day after both benchmarks fell as the International Energy Agency accelerated emergency stock releases.
However, this time tighter US inventories, lost Gulf production and a worsening security picture around the Strait of Hormuz outweighed the promise of more reserve barrels.
Hormuz attacks turn logistics into the bigger oil risk
The immediate catalyst is the escalation around Gulf shipping.
Tanker attacks through the Strait of Hormuz reached their highest weekly level since the US-Israel war with Iran began, while a vessel north of Qatar was struck by multiple projectiles and casualties were reported.
Commodity-vessel traffic through Hormuz has also fallen to its lowest in more than two months.
That matters because Hormuz carried flows equivalent to roughly one-fifth of global oil and fuel trade before the conflict.
InTouch Capital Markets analysts said that renewed Houthi attacks on Saudi Arabia and US Gulf shutdowns were both supporting prices.
The Houthis’ recent advances have also increased concerns around the Bab el-Mandeb Strait, adding another vulnerable chokepoint to the market.
The problem is increasingly logistical. The Financial Times reported that some tanker captains are being offered as much as $100,000 a month to sail through Hormuz as freight, insurance and crew costs soar.
Hurricane Isaias removes US barrels at the wrong time
Oil is also gaining support much closer to home. Shell and Chevron have curtailed offshore operations as Hurricane Isaias approaches the US Gulf Coast.
Producers had shut about 25% of Gulf oil output and more than 16% of natural-gas production by Wednesday.
That comes as domestic inventories are already falling. US crude stockpiles dropped 3.2 million barrels to 424.1 million in the latest week, exceeding expectations, while distillate inventories remained unusually low for the time of year.
The combination is particularly important because diesel markets remain tight globally.
Losing offshore production or refinery capacity for even a short period could therefore have an outsized effect on fuel prices.
More supply is coming but the buffer remains thin
There are still meaningful brakes on the rally. Middle East exports have recovered through alternative routes, while the IEA plans to accelerate delivery of roughly 100 million barrels still outstanding from its earlier emergency-release programme.
Those barrels can soften temporary shortages, but they do not create new production capacity.
Goldman Sachs commodities strategist Daan Struyven said worsening attacks could produce much larger shipping disruptions.
The bank has outlined a scenario in which Brent could approach $120 if Middle East vessel attacks intensify, while normalised exports could instead push prices back towards $80.
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