Oil Prices Extend Gains to Fourth Day as US-Iran Hostilities Intensify

Oil prices rose for a fourth consecutive day on Thursday, pushed higher by escalating military actions between the United States and Iran that have intensified risks to crude shipments through the Middle East. The ongoing conflict has added a significant geopolitical risk premium to energy markets, with both major benchmarks building on strong weekly gains.

As of 21:18 ET (01:18 GMT), Brent crude futures for September delivery increased 0.7% to $85.52 per barrel, while West Texas Intermediate (WTI) crude futures rose 0.9% to $80.32 per barrel. The gains mark the fourth straight positive session for both contracts, which had already surged nearly 10% to one-month highs earlier in the week when the conflict reignited, according to Investing.com data.

Strait of Hormuz in Focus

The primary driver for the price rally is the security of the Strait of Hormuz, a critical chokepoint through which approximately one-fifth of the world's oil and liquefied natural gas supplies pass. Market concerns were amplified after the U.S. launched a new wave of strikes on Wednesday against Iranian military targets that Washington said were linked to attacks on commercial shipping.

U.S. officials stated the operation was intended to degrade Iran's capacity to threaten maritime traffic. In response, Tehran declared it was in an "existential war" with the U.S. and warned that regional energy exports could face further disruptions if hostilities persist.

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Market Outlook and US Inventories

Reflecting the uncertainty, the International Energy Agency (IEA) noted in its July Oil Market Report that renewed conflict has clouded the outlook for supply. The agency warned that the situation could derail expectations for the global market to return to a surplus in 2027.

Adding support to prices, the U.S. Energy Information Administration (EIA) reported on Wednesday that domestic crude oil inventories fell by 1.7 million barrels last week, which was largely in line with analyst expectations. Key takeaways from the report include:

• Gasoline stockpiles declined by 1.5 million barrels, signaling firm demand during the peak summer driving season.
• Distillate inventories, however, posted an unexpected increase, rising by 4.6 million barrels.