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Oil Jumps as US-Iran Conflict, Houthi Attacks Escalate Supply Fears

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Oil traded sharply higher early Thursday, rising for a fifth straight day as fighting between the US and Iran continued and Yemen's Houthi militants widened the Middle East conflict by attacking two tankers carrying Saudi oil in the Red Sea.

West Texas Intermediate crude oil for September delivery was last seen up $3.73, or 4.3%, at $90.56 per barrel, its highest level since June 4, while September Brent crude rose $4.43, or 4.7%, to $98.50.

The gains came as continued fighting in the Middle East heightened supply risks. The conflict between the US and Iran entered a 12th day, with reports that Iran launched strikes on targets in Kuwait while the US continued attacking Iranian facilities.

The fighting has blocked most shipping through the Strait of Hormuz, the chokepoint for exports from Persian Gulf countries that supplied about 20% of global daily oil demand before the war began. Only 14 ships moved through the strait over the past day, according to hormuzstraitmonitor.com, leaving 440 vessels waiting to transit the waterway.

Yemen's Houthis also attacked two tankers carrying Saudi oil exports in the Red Sea, further heightening supply concerns as the militants sought to disrupt Middle East exports.

"Crude oil extended its rally, with Brent rising as much as 2.5% to almost 96.50 dollars a barrel, its highest since early June, after Iran-backed Houthi militants struck two Saudi tankers in the Red Sea. WTI traded toward 88 dollars, leaving oil up close to 30% this month. The bid reflects the US-Iran conflict, the Houthi threat to Red Sea shipping through the Bab el-Mandeb Strait, and Tehran's dismissal of peace talks," Saxo Bank wrote.

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