HOUSTON — Crude prices climbed more than 5% on Thursday before retreating from those levels after President Donald Trump indicated that the United States had no plans to strike Iran ahead of November's midterm congressional elections.
Trading at 12:41 p.m. ET put Brent crude futures at $103.73 a barrel, a gain of $3.48 on the session, equivalent to a 3.5% advance. West Texas Intermediate crude oil, the US benchmark, advanced to $91 per barrel, adding $2.69 on the session for a gain of 3.1%.
Intraday trading pushed both crude benchmarks above the previous session's close by more than five dollars a barrel, with Brent climbing to a level not seen since late September, as market participants weighed the possibility of US military action against Iran alongside output losses in the Gulf of Mexico tied to Hurricane Isaias.
Talks between Washington and Tehran were described by Trump as moving in a constructive direction. Iran's foreign ministry, represented by Abbas Araqchi, was assessing Washington's position on a proposal that would allow Strait of Hormuz navigation to resume within a week, with a response from Tehran anticipated within days, Tasnim news agency reported.
Two officials — one from the United States government and one from Syria's military, both with knowledge of the matter — indicated that Damascus had been weighing whether to extend military support to Saudi Arabia in its ongoing armed conflict against Houthi forces in Yemen. Among the possibilities under review, according to those familiar with the deliberations, are weapons and equipment supplied in a protective role, as well as the potential deployment of personnel in an active combat capacity alongside Yemeni ground forces aligned with Riyadh.
Crude prices ended Wednesday's session on a downward trajectory after the International Energy Agency moved to hasten the drawdown of stored petroleum reserves and direct greater volumes of diesel toward markets strained by record fuel costs and conflict-driven shortfalls in supply. Traders found little comfort in the specifics of the G7's proposed 100 million-barrel SPR release, with the barrels widely understood to be drawn from an existing 400 million-barrel commitment that had not yet been fully distributed to buyers.
Shipping lanes through the Gulf and the Strait of Hormuz — a corridor that handled roughly one-fifth of worldwide oil and fuel volumes before hostilities began — faced a growing pattern of disruptions during October, as the conflict involving Iran moved into its eighth month, placing upward pressure on energy prices. Ship-targeting incidents in the strait reached their highest recorded level since hostilities began, according to an MST Marquee energy analyst, who added that further escalation remained a possibility, while Gulf producers were simultaneously pushing export volumes upward — a combination that, alongside constrained product availability and elevated logistics costs, kept prices at elevated levels; offshore platforms in US waters were also taken offline as a hurricane bore down on the region.
On Tuesday, with Hurricane Isaias tracking toward the Gulf, both Shell and Chevron scaled back their offshore operations in the region. Workers at both the Na Kika and Thunder Horse platforms were withdrawn and output at each facility brought to a halt, according to a statement from BP. Figures from the Marine Minerals Administration placed the storm-driven curtailment of Gulf of Mexico output at roughly a quarter of oil production and just over one-sixth of natural gas production among US operators, with those tallies recorded as of Wednesday.
A larger-than-forecast drawdown in crude stockpiles, paired with a modest easing in diesel holdings, lent underlying support to oil prices through the lens of US inventory figures.