Oil Prices Soar as Strait of Hormuz Traffic Slows Amid US-Iran Tensions

The crude oil market continued its rally on Thursday, pushing Brent futures to a six-week high as concerns about disruption at the Strait of Hormuz persisted. The US strikes on Iran and renewed Israeli threats have revived fears that the world's most critical oil chokepoint could face deeper disruption.

Brent futures added 59 cents, or 0.62%, to settle at $96.22 a barrel by 1327 GMT, while West Texas Intermediate climbed 78 cents, or 0.86%, to $91.79. Shipping data showed a sharp drop in traffic through the Strait of Hormuz, with only six commodity vessels transiting the waterway on Wednesday.

Iran's health minister reported that 18 people were killed and 108 wounded in Tuesday night's US strikes across the country. Israeli Defence Minister Israel Katz reiterated that Israel would 'cripple' Iran's military and civilian infrastructure if Tehran launched attacks against it, which helped push prices higher.

The supply picture has been complicated by shifting export patterns. Iraq increased its oil exports to around 2.34 million barrels per day in August, up from about 1.35 million bpd in July. Crude inventories fell by 4.5 million barrels last week in the US, the first decline since late July.

The price surge is also reshaping expectations for monetary policy. Higher oil prices and their implications for inflation led to increased bets that the Federal Reserve could raise interest rates this month. However, traders are weighing the possibility of de-escalation against the persistent risk of further strikes.