Oil prices extend gains as Middle East supply concerns keep markets on edge

Global oil prices continued to rise on Thursday as persistent uncertainty surrounding the US-Israeli conflict with Iran raised fresh concerns about disruptions to crude supplies from the Middle East.

Global oil prices continued to rise on Thursday as persistent uncertainty surrounding the US-Israeli conflict with Iran raised fresh concerns about disruptions to crude supplies from the Middle East.

Brent crude futures for October delivery increased by 26 cents, or 0.28%, to $91.87 a barrel by 0439 GMT. US West Texas Intermediate (WTI) crude for September delivery also edged higher, gaining 17 cents to reach $86 a barrel.

The more actively traded October WTI contract climbed 12 cents, or 0.13%, to $89.91 per barrel.

Both major oil benchmarks extended their winning streak to five consecutive sessions. Brent and WTI had already settled at their highest levels since July 24 in the previous trading session, reflecting growing market concerns over the potential impact of prolonged geopolitical tensions on global energy supplies.

Market analysts said oil prices were being supported primarily by uncertainty rather than a major new escalation in the conflict.

“Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, a unit of Nissan Securities.

Kikukawa said crude prices could continue their gradual upward movement as investors monitor developments surrounding peace negotiations and growing tensions involving Iran and Gulf countries, including the United Arab Emirates and Oman.

Strait of Hormuz remains key concern

The situation around the Strait of Hormuz has remained a major focus for energy markets. The strategically important waterway is a critical route for international oil shipments, and any prolonged disruption could significantly tighten global supplies.

The UAE’s decision to suspend financial and economic transactions with Iran until further notice has added another layer of uncertainty to relations between the Gulf oil producer and Tehran.

US President Donald Trump said on Tuesday that no negotiations were taking place with Iran and that the Strait of Hormuz remained open. Iranian authorities, however, maintained that the waterway was still closed.

Shipping activity through the Strait of Hormuz showed little change on Wednesday compared with the previous day, according to shipping data, as efforts to resolve the conflict remained stalled.

Before the war began on February 28, oil shipments equivalent to roughly one-fifth of global oil consumption passed through the Strait of Hormuz. Current traffic levels are significantly below those seen before the conflict, raising concerns about the availability of crude and refined petroleum products in international markets.

Fuel supply and inventories under pressure

The conflict has also affected refined fuel supplies and contributed to a reduction in inventories as refiners face tighter access to crude.

US inventories of distillate fuels, which include diesel and heating oil, declined for a third consecutive week last week, according to data released by the Energy Information Administration on Wednesday.

The decline in distillate stocks has provided additional support to oil prices, particularly as traders remain concerned about fuel availability and supply disruptions.

However, the latest US crude inventory figures offered some relief to the market. Commercial crude stocks increased by 4.4 million barrels during the week ended August 14, significantly exceeding market expectations for a decline of around 600,000 barrels.

The rise in crude inventories could limit the pace of further price increases if stockpiles continue to build. Nevertheless, traders remain focused on geopolitical developments, particularly the situation around major Middle Eastern shipping routes.

The September WTI contract is scheduled to expire later on Thursday, which could also contribute to increased market activity and volatility as traders adjust their positions and shift attention toward the October contract.