US crude tops $100 for first time in four months as Brent surges above $106 a barrel

Oil prices rose sharply 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 $5.30, or 5.24%, to $106.51 a barrel by 14:48 GMT, while US West Texas Intermediate crude climbed $5.07, or 5.3%, to $101.10 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, with fighting resuming later in the month.

Escalation continues in the Middle East

US President Donald Trump warned that the United States could target Iran’s “Peak Axe” 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 prewar levels.

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

China’s purchases could determine the direction of oil prices

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