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Oil prices jumped sharply in Asian trading on Thursday as the conflict in the Middle East entered its sixth day with no clear signs of de-escalation, fueling fears of significant supply disruptions from one of the world’s most critical energy-producing regions.
By 01:01 ET (06:01 GMT), Brent crude futures rose 4% to $84.64 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 4.2% to $77.75 per barrel.
Brent traded just below its highest level since July 2024, after both benchmarks finished Wednesday’s volatile session largely unchanged.
Middle East tensions and Hormuz closure drive oil rally
The crisis began last Friday when U.S. and Israeli forces launched coordinated strikes on Iran, triggering retaliatory missile and drone attacks across the region and raising concerns about the safety of key energy infrastructure.
Tensions escalated further this week after the U.S. Navy sank an Iranian warship near Sri Lanka in international waters, highlighting how the conflict is expanding beyond the Persian Gulf.
Markets were also closely monitoring diplomatic signals after reports suggested that Iran’s Ministry of Intelligence had reached out to Washington to discuss ending the conflict.
Tehran quickly rejected those claims, calling them “pure falsehood” and accusing Western media of spreading misinformation, which dampened hopes for a quick diplomatic breakthrough.
Supply fears intensified after Iran effectively closed the Strait of Hormuz, one of the most important oil transit routes in the world. Roughly 20% of global oil shipments pass through the narrow waterway, making any disruption a major risk to global energy markets.
The impact is already being felt across the region. Reports indicated that Iraq declared force majeure on some crude exports as shipments through the Strait of Hormuz became severely disrupted.
U.S. inventory data offers limited relief
Despite the surge in geopolitical risk, U.S. supply data provided a mildly bearish signal.
Weekly figures from the American Petroleum Institute (API) showed that U.S. crude inventories increased by 5.6 million barrels in the week ending February 28, significantly above expectations for a build of around 2.2 million barrels.
However, the increase was still much smaller than the 11.4 million-barrel jump recorded the previous week.
Investors are now awaiting official inventory data from the U.S. Energy Information Administration (EIA) later on Thursday, which could provide clearer insight into supply conditions in the world’s largest oil consumer.
With tensions still escalating and critical shipping routes under threat, oil markets remain highly sensitive to geopolitical developments, leaving prices vulnerable to further sharp moves in the days ahead.
