Oil prices gained for the fourth straight day on Wednesday as a sharp escalation in Middle East hostilities, including US strikes on Iranian tankers and retaliatory missile attacks, threatened global energy supplies.
Brent crude futures surged 2.7% to $100.60 per barrel, while Dubai 1st Line (Platts) energy futures surged 3.3% to $91.65/bbl.
"Oil remains close to $100, and notably Shanghai oil is now trading higher than Brent having been vastly lower in the early stages of the Iran War," noted Michael Every, global strategist at Rabobank.
The upward price movement follows US strikes on five Iranian tankers and a vessel near the Kharg Island export hub, prompting retaliatory Iranian missile launches toward Jordan, warnings to ships near Kuwait and Bahrain, and Houthi strikes on Saudi energy infrastructure.
OPEC crude production reportedly fell by 900,000 barrels per day last month to 19.9 million barrels per day, driven primarily by a 1.1 million barrel per day slump in Saudi output as security threats restricted the use of primary and backup export routes.
Meanwhile, "Crack spreads remain worryingly high all over. Refined product stocks remain worryingly low," Every noted, while Saxo Bank analysts said that diesel traded near $200 per barrel.
Oman crude front-month swaps climbed to their highest since early April, driven by Houthi attacks on Saudi Arabia, persistent Hormuz tensions, and strong Chinese buying, Reuters columnist Ron Bousso noted in a social media post.
Qatar denounced Iran's ballistic missile barrage directed at Jordan, with the Foreign Ministry stating on X that it condemns the renewal of attacks as a violation of sovereignty and international law.