Oil Prices Rise for Fourth Day as US-Iran Clashes Stoke Supply Fears

Oil prices extended their rally for a fourth consecutive session, with both major benchmarks hitting one-month highs amid escalating military actions between the United States and Iran. Fears of a wider conflict and potential supply disruptions through critical Middle East waterways are adding a significant geopolitical risk premium to the market.

Escalating Conflict Drives Prices Higher

The latest price surge follows a new wave of U.S. strikes against Iranian coastal defenses and missile sites on Wednesday, according to a Reuters report. In response, Iran threatened to curtail regional energy exports, describing the situation as an "existential war" with the U.S.

By early trading on Thursday (0026 GMT), key oil futures benchmarks reflected the heightened risk:

• Brent crude futures climbed 33 cents, or 0.4%, to $85.28 a barrel.
• U.S. West Texas Intermediate (WTI) futures rose 42 cents, or 0.5%, to $80.02 a barrel.

Focus on Critical Supply Chokepoints

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The conflict reignites concerns over the security of the Strait of Hormuz, a vital maritime chokepoint that handled approximately one-fifth of the world's oil and liquefied natural gas trade before hostilities began. Analysts also note that Iran has signaled it could leverage its Houthi allies in Yemen to threaten the Bab el-Mandeb strait, potentially jeopardizing two of the world's most critical energy arteries.

"With tensions in the Middle East flaring up again, buying is taking the lead," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, in a comment to Reuters. He added that while a full-scale war is not the consensus view, WTI could rise to the $85–$87 range depending on developments.

Analyst Outlook and Inventory Data

The uncertainty has led to a wide range of forecasts. Goldman Sachs analysts project that Brent could exceed $110 per barrel in the fourth quarter if Gulf exports remain stalled. Conversely, they see prices potentially falling into the $60s by year-end if the conflict de-escalates and production recovers.

Meanwhile, the latest U.S. inventory data provided a less bullish signal. The Energy Information Administration (EIA) reported that crude stockpiles fell by 1.7 million barrels last week, a smaller draw than the 2.6 million-barrel decline analysts had anticipated. This fundamental data point, however, was overshadowed by the more immediate geopolitical concerns.