Oil prices climbed sharply on Thursday as escalating tensions in the Middle East heightened concerns over potential further disruptions to crude supply. Brent crude for November delivery settled 7.98% higher at $109.29 per barrel, while WTI crude for October gained more than 8% on Thursday and added nearly 2% more to trade at $104.06 per barrel in the latest session.
The military confrontation between the United States and Iran, which has now lasted over six months since late February, has brought the Strait of Hormuz — the world's most vital energy transit chokepoint — to a near standstill, with little indication that a ceasefire will be reached in the near term. Over the past two weeks, hostilities have escalated further, including American strikes on Iranian tankers and Iranian ballistic missile attacks on a US military base in Jordan. Reports indicate that White House advisers, including Vice President JD Vance, have informed President Trump that the conflict could persist through the remainder of his term, which runs until January 2029. Meanwhile, a senior Iranian official stated that Tehran has successfully rebuilt its missile capabilities, and if Washington intensifies its attacks, Iran would escalate strikes against American and Gulf-region assets.
The deteriorating situation in Yemen has further compounded uncertainty across the region. Recent days have seen clashes between Yemen's Houthi forces and Saudi Arabia. According to the latest reports, Yemeni government officials said on the 10th that after government naval forces withdrew from the strategically located Hanish Islands in the Red Sea, Houthi fighters moved in and established a military presence there. The Hanish Islands sit north of the Bab el-Mandeb Strait, near key international shipping routes, and hold significant strategic value for monitoring and securing maritime traffic. A new round of conflict between the Houthis and Saudi Arabia could turn the Bab el-Mandeb into yet another choke point for global shipping. With the Strait of Hormuz already nearly paralyzed, a blockade of Bab el-Mandeb would make it difficult for Saudi Arabia to export crude through the Red Sea port of Yanbu, adding further strain to an already tight global oil supply picture.
Brent crude has risen nearly 80% so far this year, though it remains below the wartime peak of just over $126 per barrel reached in April. European natural gas prices have also advanced, while refined products such as diesel have posted even sharper gains amid the ongoing Russia-Ukraine conflict.
"Further attacks on fuel tankers and related rhetoric suggest this conflict could last longer than analysts previously modeled," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "Traders remain skeptical of this rally, but the reality is that expectations for the duration of the conflict, along with hopes for a significant return to normal energy flows from the Gulf, are being pushed further out."
Although some crude is still leaving the Persian Gulf — with certain tankers sailing with transponders switched off to avoid detection — vessels continue to face the threat of attack. The UK Maritime Trade Operations office received reports on September 10 that two ships were struck by unidentified projectiles west of Khasab in the Sea of Oman, underscoring the sustained risks facing maritime shipping.