Key Takeaways
- Brent crude futures settled up $3.04 to $82.49 a barrel.
- Iranian parliament committee reviews bill to ban US and Israeli vessels from Strait of Hormuz.
- Houthi attacks on Saudi oil tankers in Red Sea raise geopolitical risks.
Oil prices rose significantly on Thursday, with Brent crude futures settling up $3.04 or 3.83 percent to $82.49 a barrel, and US West Texas Intermediate (WTI) futures up $2.07 or 2.75 percent to $77.29.
The rise in oil prices was driven by concerns over potential disruptions to shipping through the Strait of Hormuz, following reports that an Iranian parliament committee is reviewing a bill to ban US and Israeli vessels from the strait and impose fines up to 20 percent of cargo value on violators.
An Iranian lawmaker stated that the preliminary bill aims to restrict access for hostile vessels in the Strait of Hormuz, which could significantly impact global oil trade. The strait is a critical passage through which one-fifth of global daily oil supplies flow.
Meanwhile, Yemen’s Houthis claimed they carried out missile and drone attacks on Saudi deployments in Marib and Hadramout, killing or wounding hundreds of Saudi-aligned fighters and destroying military camps, weapons depots, and vehicles. These attacks highlight the ongoing tensions beyond the Persian Gulf region.
Geopolitical risks persist as Gulf countries’ crude oil exports remained largely steady but about 40 percent below pre-war levels in July. Iran has warned that any new US attack on its territory would trigger retaliatory strikes against critical energy infrastructure across the region, raising concerns over potential supply disruptions.
The market remains volatile, with prices fluctuating as tensions rise and fall. Analysts note that these developments could push oil prices back to higher levels if geopolitical risks escalate further. Crude traders are closely monitoring the situation in both the Persian Gulf and the Red Sea.
Saudi Arabia has slightly lowered its official selling price for Arab Light crude oil to Asia in September, a move reflecting ongoing market uncertainties. Elsewhere, a major Russian oil refinery in Yaroslavl was on fire after a Ukrainian drone attack, highlighting the broader impact of regional conflicts on energy infrastructure.
Crude traders remain focused on the US/Iran agreements, and the longer the delays, the more prices will fade back to the upside.
Dennis Kissler, Senior vice president of trading at BOK Financial
The market is going up and down as tensions rise and fall and of course these attacks are a significant development because it is more activity in the other theatre, away from the Persian Gulf, and is a reminder that the Red Sea passageway could still be in jeopardy.
John Kilduff, Partner at Again Capital
