Brent crude futures settled $3.67, or 3.88%, higher at $98.29 a barrel on Thursday after new attacks on tankers revived worries about oil supplies. US West Texas Intermediate crude closed $2.40, or 2.72%, higher at $90.52 a barrel. The rebound reversed Wednesday, when both benchmarks fell more than 8% to their lowest settlements since 31 August.
Britain’s UK Maritime Trade Operations agency said attacks on tankers in the Gulf were still running close to a record pace, with at least five vessels reporting incidents since Sunday. The pace was similar to October, when the agency said 35 vessels were hit, the most in any month of the war.
Gelber and Associates wrote that Thursday’s rebound reflected caution about pricing in a rapid normalisation of oil flows before diplomatic progress translated into dependable shipping and deliveries. Andy Lipow, president of Lipow Oil Associates, said reports of tankers striking mines in the Middle East or being targeted by drones continued to worry the market, as did Iran’s unchanged position on negotiations with the United States.
The war, which US President Donald Trump launched with Israel in February, produced sharply higher fuel prices that became major grievances for voters. Democrats took control of both houses of the US Congress in Tuesday’s midterm elections, routing Trump’s Republican Party. The new Democratic-controlled Congress takes office in January. Citi said there were concerns that, with the midterms over, the White House could focus on its executive powers in foreign policy and potentially escalate the war with Iran.
Eurasia Group lowered its estimate for the chance of renewed US strikes on Iran to 60% from 65% and cut the probability of a deal to 10% from 20%, as Iran has held firm on demands that Trump is viewed as unlikely to accept. It raised the likelihood of a continued standoff to 30% from 15%. Despite the recent drop in oil prices, the group said any escalation could push Brent into a $110 to $125 a barrel range.
Iran’s foreign ministry said Foreign Minister Abbas Araqchi discussed the “latest progress” in diplomatic efforts to promote regional stability in separate calls with his Saudi and Qatari counterparts. Saudi Arabia, the world’s biggest oil exporter, issued alerts on Thursday warning of potential danger in Yanbu, its Red Sea oil export hub, as Yemen’s Iran-aligned Houthis continued attacks on the kingdom. The Houthis later said they attacked King Fahd airport in the Saudi city of Dammam. There was no immediate confirmation from Saudi authorities.
Iran’s Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire in separate incidents after attempting to use unauthorised routes through the Strait of Hormuz. Elsewhere, Ukraine renewed attacks on Russian oil refineries, raising concerns about Russia’s ability to export diesel under a deal with Trump. A Reuters video analysis indicated that the Ryazan refinery, one of Russia’s largest, appeared to have been targeted in a large overnight drone attack on industrial sites southeast of Moscow. If confirmed, it would be the second Russian refinery hit this week, after the Yaroslavl plant on Monday night.