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FINWIRES

US Oil Update: Crude Extend Gains on Red Sea Closure Fears

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Oil benchmarks gained for a fourth straight day on Thursday as Iran reportedly threatened to close Red Sea shipping routes, exacerbating supply fears.

Front-month West Texas Intermediate crude futures rose about 0.7% to $80.12 per barrel, while Brent futures were up 0.7% at $85.58/bbl.

"The interim US-Iran peace deal has effectively collapsed, with both sides accusing each other of violations and Iran threatening vessels transiting the strait," Saxo Bank analysts said.

Reuters reported that Iran asked it's proxy, the Houthi forces, in Yemen to prepare for a potential closure of the Red Sea route should the US target Iranian power infrastructure.

Logistical volatility extended to Iraq, where crude loading operations were reportedly briefly suspended at all terminals following a drone strike on a tanker in Basra.

These regional disruptions, coupled with the International Energy Agency's warning that a prolonged blockage could significantly damage the global economy, have intensified market anxiety, Saxo Bank analysts said.

"Combined with Russian export restrictions, the greatest stress remains concentrated in refined fuel markets, particularly diesel," they added.

Ukrainian naval drones have struck two oil tankers, Louise 1 and Banda, linked to Russian crude oil exports in the Black Sea, escalating the campaign against Moscow's shadow fleet, the Security Service of Ukraine said on Telegram Thursday.

Meanwhile, Russian energy companies have approached Indian refiners for additional gasoline supplies after Ukrainian strikes severely disrupted Russia's refining capacity, Reuters reported Wednesday, citing sources.

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