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Oil prices surged nearly 4% on Thursday as expectations of U.S. production cuts after production along the Gulf Coast could be disrupted by adverse weather conditions, alongside reports of possible new strikes on Iran, fueling supply concerns.
International benchmark Brent crude was up 3.8% at $104 per barrel, while U.S. benchmark WTI traded 3.7% higher at $91.60 per barrel as of 7.30 a.m. GMT.
Across global markets, major Asian stocks mostly edged lower, with Japan’s Nikkei 225 falling 1.4% and South Korea’s Kospi sliding more than 2.6%. China’s Shanghai Composite declined 0.8%, while Hong Kong’s Hang Seng shed 1.5%.
In early trading, the benchmark pan-European Stoxx 600 index fell 0.6%, while Germany’s DAX 30 declined 1%, the U.K.’s FTSE 100 dropped 0.7%, France’s CAC 40 fell 0.7%, and Spain’s IBEX 35 declined 0.9%. The pan-European Stoxx 600 later extended its losses to 1%, nearing its lowest level in four months.
U.S. futures tied to the three major indexes also retreated, with tech-heavy Nasdaq futures down 0.4%.
Gold slightly pared some of Wednesday’s losses, gaining 0.3% to $4,120 per ounce, while silver fell 1.5% to $58.90. Palladium and platinum both gained 1%, trading at around $1,640 and $1,120 per ounce, respectively.
Cryptocurrencies also mirrored the broader sell-off, with Bitcoin falling 1.5% to $82,960 and Ethereum slipping 1.8% to around $2,570. The total cryptocurrency market capitalization fell 1.5% to $2.8 trillion.
Reports indicated that nonessential personnel were being evacuated from offshore oil and natural gas facilities as a storm approached the Gulf of Mexico. BP, Chevron and Shell were among the companies expected to face the greatest exposure to potential production cuts.
The Energy Information Administration said commercial crude inventories fell about 3.2 million barrels last week to 424.1 million, against expectations for a 1.9 million-barrel increase. Strategic petroleum reserves also fell 800,000 barrels to 283 million.
At the same time, reports suggested U.S. President Donald Trump was weighing the timing of possible strikes against Iran and had ordered the military to remain prepared. Axios, citing sources familiar with the matter, reported that U.S. and Israeli officials were considering the possibility of attacks before elections scheduled in Israel on Oct. 27 and in the U.S. on Nov. 3.
The sources also indicated that continued strikes could target Iran’s energy infrastructure and nuclear facilities, adding to concerns over potential disruptions to regional oil supplies.
Meanwhile, continued attacks on commercial vessels in the Strait of Hormuz are adding to concerns over supply disruptions and keeping pressure on oil prices.
A tanker was attacked 51 nautical miles north of Madinat ash Shamal, Qatar, according to the United Kingdom Maritime Trade Operations (UKMTO). The incident reportedly left people dead and injured, while authorities had yet to identify those responsible or the type of weapon used.
Iran’s Revolutionary Guards Corps also warned earlier this week that it would soon close what it described as "illegal" routes through the Strait of Hormuz, which it said were being used by small boats to smuggle oil and transfer it to tankers.
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