Brent holds above $100 as tanker attacks deepen supply fear

U.S. West Texas Intermediate crude was at $96.24 ​a barrel, up 0.2%. Brent prices have surged nearly 30% from lows touched ​in early August as a permanent agreement between the U.S. and ⁠Iran to cease attacks never materialised, while renewed fighting began later in the ​month.

Iran said on Wednesday it had attacked 10 ships near the Strait of Hormuz ​after the U.S. sank five Iranian oil tankers, and Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

"The tit-for-tat attacks suggest oil flows from the ​Persian Gulf are likely to remain disrupted for the foreseeable future," ANZ ​analyst Daniel Hynes said in a client note. Oil flows through the Strait of Hormuz, the waterway that ‌before ⁠the war carried roughly a fifth of global oil and gas supplies, remain far below pre-war levels.

Pressure is mounting on alternative channels for Gulf oil exports, with Iran-aligned Houthi militants stepping up strikes against Saudi Arabia, threatening crude shipments via ​the Red Sea.

Uncertainty ​around actual volumes ⁠coming from the Strait of Hormuz and continued shipping disruptions are keeping physical markets tight and supporting a geopolitical risk ​premium in oil prices, OCBC analyst Christopher Wong said in ​a note.

In ⁠the physical crude oil market, the dated Brent oil benchmark, against which roughly two-thirds of supply is priced, has been above $100 per barrel since September 3, according ⁠to LSEG ​data.

The U.S. Energy Information Administration on Wednesday raised its ​oil price forecasts for this year and next, as global stockpiles drop due to the loss ​of Middle Eastern supply.