Oil prices rose to a six-week high on Thursday following fresh U.S. strikes on Iran and renewed Israeli threats against Tehran, raising concerns that the conflict could disrupt oil supplies in the Middle East.
Brent crude futures rose by $1.66, or 1.7 per cent, to $97.29 a barrel by 1200 GMT, while U.S. West Texas Intermediate crude increased by $2.03, or 2.2 per cent, to $93.04.
Both oil benchmarks were heading for a fourth consecutive day of gains after reaching their highest levels in six weeks earlier in the session.
Iranian officials said the latest U.S. strikes caused casualties across the country. Iran’s health minister said 18 people were killed and 108 wounded in Tuesday night’s attacks.
The Iranian Red Crescent also reported that four people were killed and 67 injured during a wedding ceremony near the coast of the Strait of Hormuz.
The semi-official Tasnim news agency reported that three Iranian army pilots were also killed in the U.S. strikes.
The latest attacks have increased concerns about the Strait of Hormuz, a major route for global oil shipments.
Preliminary shipping data showed that six commodity vessels passed through the strait on Wednesday, compared with 11 vessels the previous day and an average of about 13 over the previous 10 days.
Israeli Defence Minister Israel Katz has also warned that Israel could target Iran’s military and civilian infrastructure, including energy facilities, if Tehran launches attacks against Israel.
Saxo Bank analyst Ole Hansen said Katz’s comments contributed to the latest rise in oil prices.
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UBS energy analyst Giovanni Staunovo said the oil market remained tight because global oil inventories were still declining. He added that continuing tensions in the Middle East were also supporting higher oil prices.
Iran has meanwhile added more ships to a list of vessels it considers non-compliant. Such vessels could face fines, confiscation or detention if they attempt to pass through the Strait of Hormuz. Iraq also increased its oil exports to about 2.34 million barrels per day in August, up from about 1.35 million barrels per day in July, according to Iraqi energy officials.
The increase came as heavy discounts and Iranian approval for Iraqi tankers to pass through the Strait of Hormuz encouraged buyers.
In wider financial markets, traders have also increased their expectations that the U.S. Federal Reserve could raise interest rates this month.
