Oil extends gains as Brent rises above $102 a barrel

Oil prices rose on Thursday, extending gains that pushed Brent crude above $100 a barrel in the previous session, as traders braced for further supply disruptions after Iran and the United States launched their largest wave of attacks on shipping since their conflict began six months ago.

In trading, Brent crude futures rose 83 cents, or 0.8%, to $102.04 a barrel by 12:31 GMT, while US West Texas Intermediate crude climbed $1.32, or 1.4%, to $97.37 a barrel.

Brent prices have surged around 30% from their lows in early August after the United States and Iran failed to reach a lasting agreement to halt attacks and fighting resumed later in the month.

US President Donald Trump warned that the United States could target Iran’s “Peak X” mountain, urging Tehran to be careful, and said the war was likely to continue beyond the US midterm elections in November.

Iran said it attacked 10 vessels near the Strait of Hormuz on Wednesday after the United States sank five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

Oil flows through the Strait of Hormuz, the waterway that carried around one-fifth of global oil and gas supplies before the war, remain well below pre-war levels.

Pressure is also mounting in the Red Sea as Iran-aligned Houthis intensify attacks on Saudi Arabia. Three sources told Reuters on Thursday that the Houthis had seized the Yemeni city of Mokha on the Red Sea coast.

While concerns that supply disruptions in the Gulf could persist for longer and become more severe have pushed Brent above $100 a barrel, analysts say the sustainability of the rally will depend on China.

In the physical crude market, Dated Brent, the benchmark used to price around two-thirds of global crude supplies, has remained above $100 a barrel since September 3, according to LSEG data.

Chinese buying could determine the path of oil prices

China, the world’s largest crude oil importer, has stepped up purchases in recent weeks after months of weak demand, strengthening physical crude markets, ING analysts said in a note.

ING said a sustained recovery in Chinese buying could amplify the impact of any supply disruptions and push prices higher, while a pullback in imports could limit the market’s gains.