Oil Prices Rise as Hormuz Shipping Risks and US Storm Threaten Supply

Oil prices rose on Thursday as traders faced renewed supply concerns linked to attacks on shipping in the Gulf and the Strait of Hormuz.

Brent crude futures gained $2.28, or 2.28%, to $102.28 a barrel by 0427 GMT. US West Texas Intermediate (WTI) crude rose $1.66, or 1.88%, to $89.94.

The gains came after prices fell on Wednesday. The International Energy Agency (IEA) had agreed to accelerate oil stock releases and prioritise diesel supplies.

Governments launched the measures to address fuel price pressures and supply disruptions linked to the Iran war.

Hormuz Risks Keep Oil Prices High

Shipping risks have increased across the Gulf and the Strait of Hormuz. The waterway handled shipments equal to about 20% of global oil and fuel supplies before the war.

Attacks on tankers reached their highest weekly level last week since the conflict began. Gulf producers have increased exports, but shipping companies now face higher costs and security risks.

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The latest incident involved a tanker north of Qatar. Multiple projectiles struck the vessel and caused casualties, according to the United Kingdom Maritime Trade Operations agency.

Saul Kavonic, head of energy at MST Marquee, said Iranian attacks on shipping had reached their highest level since the war began.

He also warned that the attacks could intensify further.

ANZ analyst Daniel Hynes said the IEA release would likely draw on barrels already included in its original 400-million-barrel release plan.

He said strategic stock releases can support supply for a limited period but cannot create new production capacity.

Hurricane Hits US Oil Production

A second supply concern came from the United States, where Hurricane Isaias moved toward offshore oil and gas production areas.

Shell and Chevron said they had reduced offshore operations in the Gulf of Mexico as the storm approached.

US Gulf producers had shut in about 25.08% of oil production and 16.37% of natural gas production as of Wednesday, according to US government data.

The production cuts added further pressure to global supply expectations.

US Oil Inventories Fall

US inventory data also supported crude prices.

The Energy Information Administration said US crude inventories fell by 3.2 million barrels in the week ended October 2. Stocks stood at 424.1 million barrels.

Analysts had expected a decline of about 1.7 million barrels.

Distillate inventories, which include diesel and jet fuel, also fell by 42,000 barrels to 105.14 million barrels.

The latest stock levels remain below the five-year average for this period of the year.

The combination of shipping risks, production disruptions and falling US inventories has kept oil markets under pressure as traders assess the outlook for global supplies.