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Oil prices jumped sharply in Asian trading on Thursday, briefly climbing above the key $100 per barrel level as escalating disruptions to global energy supplies fueled market anxiety during the ongoing U.S.-Israel conflict with Iran.
By 01:03 ET (05:03 GMT), Brent crude futures rose 7.6% to $99.00 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 6.8% to $91.93 per barrel.
Brent had earlier surged to $101.59 per barrel, crossing the psychologically important $100 threshold before paring some gains.
Tanker attacks and port evacuation fuel supply fears
Energy markets were rattled by reports of direct attacks on oil infrastructure and shipping routes across the Persian Gulf.
Media reports indicated that two international oil tankers were attacked in the northern Persian Gulf near Iraq and Kuwait, with footage circulating online showing the vessels engulfed in flames. Iraqi media outlets attributed the strikes to Iranian forces.
Meanwhile, Oman evacuated all vessels from its key oil export terminal at Mina Al Fahal, according to a Bloomberg report, as a precaution following a series of attacks targeting ships in the region.
Adding to concerns about global supply, China reportedly banned all exports of refined fuel in March in an effort to protect domestic fuel availability amid the escalating conflict.
These developments signal that disruptions from the Iran conflict are now spreading beyond the Strait of Hormuz, as the war entered its thirteenth consecutive day.
Strait of Hormuz blockade remains critical risk
The attacks on oil tankers and precautionary port closures have heightened fears of widespread supply disruptions, particularly after Iran warned that no crude shipments would be allowed through the Strait of Hormuz.
The narrow waterway, located between Iran and Oman, handles about 20% of global oil supplies, making it one of the most important energy transit routes in the world.
Reports earlier this week indicated that Iran had already blocked the passage through the strait, significantly raising concerns about global energy shortages.
Analysts noted that the key question for markets may now shift from whether supply will be disrupted to how long producers can maintain output amid worsening operational conditions.
Strategic reserve releases limit gains
Despite the sharp rally, oil prices retreated from their session highs as governments moved to counter potential supply shocks.
Reports suggested that the International Energy Agency (IEA) is preparing to release a record 400 million barrels of oil from strategic reserves in an attempt to stabilize global markets.
In addition, U.S. President Donald Trump announced plans to release 172 million barrels from the U.S. Strategic Petroleum Reserve, aiming to mitigate the economic impact of the conflict on energy prices.
Even with these measures, the geopolitical situation remains volatile. The war between Iran, the United States, and Israel continues to intensify, despite repeated statements from U.S. officials earlier in the week suggesting the conflict could soon end.
Oil markets remain highly volatile
Crude prices have swung dramatically in recent days, briefly approaching $120 per barrel earlier this week before retreating as markets assessed potential emergency supply measures.
Separately, data released Wednesday showed that U.S. crude inventories rose by 3.8 million barrels last week, exceeding expectations and offering a modest counterweight to supply concerns.
With shipping lanes under threat and major producers facing operational risks, oil markets are likely to remain highly volatile as traders monitor developments in the Middle East and potential interventions by global energy authorities.
