Trade was volatile as Iran attacked energy targets in the Middle East overnight, leading the US government to take steps to expand supplies as President Donald Trump looks to November’s midterm elections where his Republican Party hopes to retain control of the US Congress.
Brent futures were up $1.00, or 0.93%, at $108.46 a barrel by 12:39 PM CDT (1739 GMT). Earlier in the session, Brent rose more than $11 to a high of $119.13, near a three-and-a-half-year high touched on March 9.
U.S. West Texas Intermediate crude was up 45 cents, or 0.47%, at $96.77 a barrel, after earlier trading up nearly $4 at $100.02. WTI is trading at its biggest discount to Brent in 11 years.
Premiums in Middle East benchmarks Dubai and Oman hit all-time highs of around $65 a barrel, according to trade sources and Reuters data.
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Trump is eager to tackle rising fuel costs ahead of the November elections, and Treasury Secretary Scott Besant said the U.S. Sanctions may soon be lifted on Iranian oil trapped on tankers, which amounts to about 140 million barrels.
Besant also said another release of crude oil from the US Strategic Petroleum Reserve was possible.
“This pullback from the high suggests the market has gained more confidence in supply,” said Phil Flynn, senior analyst at Price Futures Group.
On Wednesday, the Federal Reserve heldU.S. Interest rates are stable, representing high inflation as policymakers look at the impact of the war.
Attacks and counterattacks
Israel attacked Iran’s South Pars gas field, but Trump said late Wednesday that the US and Qatar were not involved. South Pars is the Iranian field of the world’s largest natural gas reserves, which Iran shares with US ally Qatar on the other side of the Gulf.
Trump said Israel would not attack Iranian facilities in southern Pars again until Iran attacked Qatar and warned that the US would respond if Iran acted against Doha.
On Wednesday, QatarEnergy said an Iranian missile attack had caused “extensive damage” at Ras Laffan, the site of Qatar’s main LNG plant and the world’s largest. The attack also hit Shell’s 140,000 barrel-per-day Pearl gas-to-liquids plant in Qatar, halting output.
European gas prices rose the most in more than three years.
Saudi Arabia said it intercepted four ballistic missiles and an attempted drone strike on a gas facility.
Saudi Aramco’s SAMREF refinery, in which Exxon owns a stake, in the Red Sea port of Yanbu, was also targeted in airstrikes on Thursday. Oil loading at the port was disrupted but has now resumed.
Kuwait Petroleum Corporation said its Mina Al-Ahmadi refinery was hit by a drone, causing a limited fire.
Earlier, Reuters reported that Trump’s administration is considering deploying thousands of US troops to bolster its operations in the Middle East.
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