Oil prices surged more than 6% on Thursday after an escalation of attacks on tankers in the Middle East, pushing both Brent crude and U.S. benchmark West Texas Intermediate (WTI) above $100 a barrel.
Brent futures ended the session up $6.42, or 6.34%, at $107.63 a barrel. WTI rose $6.43, or 6.69%, to $102.48 a barrel, crossing the $100 threshold for the first time since May.
Both benchmarks touched their highest levels since May 19, marking their biggest one-day gain in nearly two months.
New threats to shipping routes
Yemen's Iran-aligned Houthi rebels took control of the port of Mocha on Thursday, creating a fresh threat to shipping in the Red Sea. At the same time, vessel traffic in the Gulf has stayed limited through the Strait of Hormuz, as attacks on tankers in the area have intensified in recent days.
Simon-Peter Masambani, head of business development at XS.com, said attacks from Yemen on Saudi Arabian energy facilities were introducing a new risk factor for the market, broadening concerns beyond Iran and the Strait of Hormuz.
He said the threat was no longer confined to a single strategic chokepoint but now included the risk of disruptions that could affect export routes, oil facilities and the region's wider energy infrastructure.
Iranian attacks near the Strait of Hormuz
U.S. President Donald Trump warned that Washington might strike Pickaxe Mountain in Iran, near the heavily damaged uranium enrichment site at Natanz, and said he believed the war would likely continue beyond November's midterm elections.
Iran said it attacked ten ships near the Strait of Hormuz on Wednesday, following U.S. strikes on five Iranian tankers. Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attack.
A new analysis from S&P Global Energy said that with the chances of a definitive resolution to the conflict with Iran diminishing, and Brent having recently topped $100 for the first time since July, oil markets were entering a prolonged new reality in which the risk of disruption is permanent rather than occasional.
Focus turns to China
Analysts said how long the rally lasts will depend heavily on China, the world's largest crude importer.
China has stepped up its purchases in recent weeks after months of sluggish demand, lifting prices in the physical crude market, according to analysts at ING.
If the recovery in Chinese buying continues, it could amplify the impact of any supply disruptions and push prices even higher. A pullback in imports, on the other hand, could limit the market's gains.
David Yorbenadze, head of global oil markets at ICIS, said that for months the bearish case for oil had rested on weak Chinese demand.
Inventories fall as OPEC cuts demand forecast
U.S. crude oil inventories fell by 391,000 barrels last week to 424.1 million barrels, as refinery activity stayed strong, according to the U.S. Energy Information Administration (EIA). Analysts had expected a larger draw of around 1.55 million barrels.
Separately, OPEC on Thursday lowered its forecast for global oil demand growth in 2026 to 380,000 barrels per day, the fifth consecutive downward revision.
OPEC's oil production fell by 640,000 barrels per day in August, according to a Reuters survey, as Saudi Arabia's exports faced new disruptions linked to the war with Iran, while a U.S. blockade limited Iranian shipments.
