Crude oil prices surged sharply on Thursday, with West Texas Intermediate (WTI) soaring 6.2% to close at $92.19 per barrel. Brent crude crossed the psychological $100 mark for the first time since May, climbing 7% to reach $100.69. The spike came amid escalating tensions in the Middle East, triggering fears over the security of vital supply routes and amplifying risks to global oil flows.
Heightened Supply Concerns from Middle East Strife
The recent attacks on two Saudi oil tankers in the Red Sea, claimed by Houthi forces based in Yemen, intensified worries about shipping through strategic chokepoints. The Bab el-Mandeb Strait, linking the Red Sea to the Gulf of Aden, plays a critical role in Saudi oil exports, especially when disruptions occur at the Strait of Hormuz. Iranian military forces have tightened control around the Hormuz passage amid ongoing conflict, further complicating maritime logistics.
These developments have led traders to add significant risk premiums to crude prices. The increased insurance costs, security challenges, and forced rerouting of tankers have slowed shipments and heightened uncertainties over supply availability. Although OPEC+ plans a modest output increase of 188,000 barrels per day in September, market participants remain cautious about whether this will offset the disruptions.
US Political Divisions Add to Market Volatility
The US Senate's narrow rejection of a war powers resolution aimed at limiting military action against Iran added another layer of uncertainty. The 47-49 vote means the current administration can continue its operations without congressional restrictions, but deep divisions persist, as the House passed a different resolution by a slim margin. This political deadlock leaves questions about the US role in the escalating Middle East tensions unresolved, which in turn influences oil market sentiment.
Energy prices have felt the impact beyond crude benchmarks: the national average gasoline price has jumped to $4.09 per gallon, reflecting tighter supply expectations and growing cost pressures for consumers.
Technical Breakthroughs Signal Further Gains Possible
WTI crude broke above its 100-day moving average near $89.71 during Thursday’s session and touched an intraday high close to $93.50, surpassing the 50% Fibonacci retracement level from prior declines. This technical action suggests momentum is building, with the $89.71 level now serving as support after capping gains earlier this summer. Traders will closely watch these price points for signals about the next directional moves amid ongoing geopolitical uncertainty.
