Oil jumps more than 3% on supply fears as Iran conflict widens

TOKYO/SINGAPORE: Oil prices rose more than 3% on Thursday, extending a rally as the escalating U.S.-Israeli war with Iran fuelled fears of prolonged disruptions to vital Middle East oil and gas supplies.
Brent crude was up $2.44, or about 3%, at $83.84 a barrel by 0722 GMT, marking a fifth consecutive session of gains. U.S. West Texas Intermediate (WTI) crude gained $2.44, or 3.27%, to $77.10.
Markets remained on edge amid heightened supply risks following the conflict, with investors focused on trade flows through the Strait of Hormuz, ANZ analysts said in a note on Thursday.
Iran launched a fresh wave of missiles at Israel early on Thursday, according to reports, as the conflict entered its sixth day. The developments came hours after efforts to halt U.S. attacks were blocked in Washington, Reuters reported.
On Wednesday, a U.S. submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, and NATO air defences destroyed an Iranian ballistic missile fired towards Turkey, Reuters said.
Iranian forces have also struck oil tankers in or near the Strait of Hormuz. Explosions were reported near a tanker off Kuwait, according to the United Kingdom Maritime Trade Operations.
The disruption has spilled into regional energy supply. Iraq, the second-largest crude producer in the Organization of the Petroleum Exporting Countries, has cut output by nearly 1.5 million barrels per day due to storage constraints and limited export routes, officials told Reuters.
Qatar, the Gulf’s largest producer of liquefied natural gas, declared force majeure on gas exports on Wednesday, with sources saying a return to normal production volumes could take at least a month.
Two oil traders said they remained bullish, citing a low likelihood of a swift resolution.
At least 200 ships – including oil and LNG tankers as well as cargo vessels – were anchored in open waters off major Gulf producers including Iraq, Saudi Arabia and Qatar, according to Reuters estimates based on ship-tracking data from MarineTraffic. Hundreds of other vessels remained outside Hormuz, unable to reach ports, shipping data showed. The waterway is a key route for around a fifth of the world’s oil and LNG supply.
China’s government has asked companies to suspend signing new contracts to export refined fuel and to try to cancel already-committed shipments, industry and trade sources said on Thursday._ Reuters