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NEW DELHI: Oil prices dipped on Thursday but Brent crude remained above $100 a barrel as traders braced for deeper supply disruptions \u200bafter Iran and the US launched their largest attacks on shipping \u200csince their six-month-old conflict began.<\/p>\n
Brent crude futures were down 0.7 percent to $100.50 a barrel by 09:19 a.m. Saudi time. US West Texas Intermediate crude was at $95.58, down 0.5 percent.<\/p>\n
Brent prices have surged nearly 30 percent from lows touched in \u200bearly August as a permanent agreement between the US and Iran to cease \u200battacks never materialised and fighting resumed later in the month.<\/p>\n
Iran said on Wednesday it had attacked<\/u> \u206010 ships near the Strait of Hormuz after the US sank five Iranian oil tankers, \u200band Iran\u2019s Islamic Revolutionary Guard Corps said it would escalate its response to any further \u200battacks.<\/p>\n
President Donald Trump warned<\/u> on Wednesday that the US may hit Iran\u2019s Pickaxe Mountain, urging Tehran to be cautious.<\/p>\n
\u201cRenewed hostilities between the US and Iran, after nearly a month of relative calm, have once \u200bagain lifted the geopolitical risk premium in crude oil,\u201d said Sugandha Sachdeva, the founder of \u200bSS WealthStreet, a New Delhi-based research firm.<\/p>\n
Oil flows through the Strait of Hormuz<\/u>, the waterway that before the \u200cwar \u2060carried roughly a fifth of global oil and gas supplies, remain far below pre-war levels.<\/p>\n
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.<\/p>\n
While fears of prolonged and \u200bmore severe supply disruptions \u200bin the Gulf have \u2060lifted Brent above $100, analysts say the durability of the rally will hinge on China.<\/p>\n
In the physical crude oil market, the dated Brent \u200boil benchmark, against which roughly two-thirds of supply is priced, has \u200bbeen above $100 \u2060since September 3, according to LSEG data.<\/p>\n
China, the world\u2019s largest crude importer, has stepped up purchases in recent weeks after months of subdued demand, boosting physical crude markets, ING analysts said \u2060in a \u200bnote.<\/p>\n
If Chinese buying continues to recover, it could amplify \u200bthe impact of any supply disruptions and drive prices higher, but a pullback in imports could temper the market\u2019s \u200bgains, ING said.<\/p>\n<\/div>\n