Brent crude oil prices extended their gains on Thursday morning, trading above $112 per barrel and reaching a five-month high, as escalating tensions in the Middle East raised fresh concerns over disruptions to global energy supplies. The latest increase follows reports of renewed Iranian attacks on commercial vessels in the Persian Gulf, with Iran's Revolutionary Guards claiming that seven ships were hit, including several near the Strait of Hormuz.
These incidents have heightened concerns over the security of one of the world's most important energy shipping routes, adding to the geopolitical risk premium embedded in oil prices. Meanwhile, recent Houthi attacks on Saudi Arabian infrastructure and the decision by Washington to withdraw diplomatic personnel from the country have reinforced fears of a broader escalation. Although oil exports from the region have recovered significantly in recent months, the growing frequency of attacks on shipping continues to raise transport and insurance costs, leaving supply chains vulnerable to further disruption.
The absence of meaningful progress in negotiations between the United States and Iran is also weighing on sentiment, with little indication that a diplomatic solution is imminent. Against this backdrop, with the prospect of a return to normality in the Persian Gulf becoming increasingly remote, there may be scope for further increases in oil prices.
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