Oil prices climbed for the fourth day in a row on Thursday as a new round of American military strikes on Iranian military targets deepened concerns about a wider conflict and potential disruptions to global energy supplies.
The United States targeted Iran’s coastal defense systems and missile installations on Wednesday, following the reimposition of a naval blockade on Iranian ports. Iran responded by threatening to cut off additional regional energy exports, describing its standoff with America as an “existential war.”
Brent crude futures moved up 33 cents, or 0.4%, reaching $85.28 per barrel as of 0026 GMT. Meanwhile, U.S. West Texas Intermediate futures gained 42 cents, or 0.5%, reaching $80.02 per barrel. Both benchmarks had already risen roughly 0.3% on Wednesday and were trading near one-month highs set the previous day.
Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, offered his take on the market movement. “With tensions in the Middle East flaring up again, buying is taking the lead,” he said. He added that “while mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85–$87 depending on how the conflict develops.”
The week’s price gains are largely tied to growing supply disruptions in the Strait of Hormuz, a critical waterway that handled roughly one-fifth of the world’s oil and liquefied natural gas trade before the current hostilities began.
The conflict between Iran and the United States reignited last week, unraveling a fragile truce that had been reached in June following several months of fighting.
Analysts note that Iran has signaled it may direct its Houthi allies in Yemen to block the Bab el-Mandeb passage into the Red Sea, potentially threatening two of the world’s most critical energy shipping routes at the same time.
Goldman Sachs projected that Brent crude could exceed $110 per barrel in the fourth quarter if the recovery of Gulf exports continues to stall. However, the bank also noted prices could drop into the $60s by year’s end if tensions subside and oil production rebounds more quickly than anticipated.
Separately, the U.S. Energy Information Administration reported that crude oil inventories dropped by 1.7 million barrels during the week ending July 10, falling short of analyst expectations for a 2.6 million-barrel decline.
