Oil prices climbed more than 2% on Thursday, with Brent crude nearing $92 a barrel and West Texas Intermediate above $85. The gains were driven by uncertainty surrounding potential US-Iran talks and threats to global supply routes, including the Red Sea and Black Sea.
Geopolitical tensions in the Middle East and threats to key shipping lanes are driving up oil prices, potentially impacting global inflation and economic growth.
Oil prices extended their gains on Thursday, rising more than 2%, as prospects for near-term talks between the US and Iran dimmed and concerns over global supply routes persisted. Brent crude traded around $92 a barrel, marking its fourth consecutive day of gains, while West Texas Intermediate was above $85.
President Donald Trump downplayed the likelihood of immediate talks with Iran, while also threatening broader strikes and vowing to respond if Iran-backed Houthi rebels in Yemen disrupted shipping in the Red Sea. The US military has conducted eleven consecutive days of attacks aimed at degrading Iran's ability to threaten commercial shipping in the Strait of Hormuz, though the waterway remains open, according to US Central Command.
Escalating hostilities in the Middle East have contributed to oil futures rallying this month, with three tankers attacked in recent days near Oman. Beyond the region, attacks on the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, a key route for Kazakhstan's crude, are also a market concern.
Some analysts believe oil prices could remain in the $80 to $90 range, depending on news flow. Jay Hatfield, chief executive of Infrastructure Capital Management LLC, suggested that a closure of the Red Sea could push prices above $100. Tankers have shown some caution approaching Yemeni waters, with some vessels rerouting, though commercial traffic through the Strait of Hormuz has decreased to a three-week low.
Bernstein and Goldman Sachs Group Inc. have flagged the possibility of crude prices returning to triple digits by year-end if the Middle East conflict intensifies and OECD inventories continue to decline.
Pick the topics you care about. Get only what matters, on your cadence.