News Maker 23

Global oil prices surged during Thursday's trading (Oct 8), driven by escalating attacks on commercial vessels in the Middle East and the threat of production disruptions caused by a storm in the U.S. Gulf region. Brent crude rose 3.9% to US$104.07 per barrel at 08:17 GMT, while West Texas Intermediate (WTI) for November delivery climbed 3.7% to US$91.53 per barrel. These gains reflect growing market concerns regarding the risk of disruptions to global energy supplies.

Geopolitical tensions have intensified following a rise in attacks on tankers in the Strait of Hormuz. Data from shipping analytics firm Kpler, cited by Reuters, indicates that shipping activity through this strategic waterway has dropped to its lowest level in over two months. The United Kingdom Maritime Trade Operations (UKMTO) also reported that a tanker was struck by multiple projectiles in waters north of Qatar on Wednesday, resulting in casualties. Concerns have deepened following reports that the Pentagon has instructed the U.S. military to prepare for potential follow-up operations against Iran, although no final decision has been made.

Regarding U.S. supply, Hurricane Isaias has further weighed on market sentiment by threatening oil and gas production facilities in the Gulf of Mexico. Major energy companies—including BP, Chevron, and Shell—have begun evacuating non-essential personnel from offshore facilities. Storm-related disruptions could potentially reduce production by up to 11.2 million barrels during the affected period. Meanwhile, U.S. crude oil inventories fell by 3.2 million barrels in the week ending October 2, defying expectations of an increase. This situation reinforces concerns regarding tight supplies, even as the International Energy Agency (IEA) moves to accelerate the release of emergency oil reserves.

Regarding the market impact, the surge in oil prices could heighten global inflationary pressures by driving up energy, transportation, and production costs. These conditions may strengthen expectations that the Federal Reserve (the Fed) will maintain high interest rates for longer, potentially bolstering the US dollar and US government bond yields. For gold (XAU/USD), rising geopolitical tensions could spur demand for safe-haven assets, though a stronger dollar and rising bond yields risk capping its gains. Meanwhile, global stock indices—particularly in the transportation and industrial sectors—could face pressure from rising operating costs. The future trajectory of oil prices will be heavily influenced by security developments in the Strait of Hormuz and the recovery of US energy production.