Oil prices climbed about 4% to a five-month high Thursday on rising concerns that global supplies could be disrupted if the U.S. decides to attack Iran, one of OPEC's biggest crude producers.
Brent futures rose $2.50, or 3.7%, to $70.90 a barrel by 12:47 p.m. EST (1747 GMT), while U.S. West Texas Intermediate (WTI) gained $2.35, or 3.7%, to $65.56.
That pushed both crude benchmarks into technically overbought territory and put Brent on track for its highest close since July 31 and WTI on track for its highest close since September 26. U.S. President Donald Trump is weighing options against Iran that include targeted strikes on security forces and leaders to inspire protesters, multiple sources said, even as Israeli and Arab officials said air power alone would not topple Tehran's clerical rulers. In Iran, meanwhile, plainclothes security forces have rounded up thousands of people in a campaign of mass arrests and intimidation to deter further protests.
Two U.S. sources familiar with the discussions said Trump wanted to create conditions for "regime change" after a crackdown crushed a nationwide protest movement earlier this month, killing thousands of people.
"The immediate (market) concern ... is the collateral damage done if Iran takes a swing at its neighbors or possibly even more tellingly, it closes the Strait of Hormuz to the 20 million barrels per day of oil that navigates it," said PVM analyst John Evans.
Iran was the third-biggest crude producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia and Iraq, according to U.S. Energy Information Administration (EIA) data.
European Union foreign ministers, meanwhile, adopted new sanctions on Iran on Thursday targeting individuals and entities involved in a violent crackdown on protesters.
Separately, the EU designated Iran's Revolutionary Guards as a terrorist organization.
"The potential for Iran getting hit has escalated the geopolitical premium of oil prices," Citi analysts said in a note.
RUSSIA, KAZAKHSTAN & VENEZUELA
The Kremlin said on Thursday that Russia had reiterated its invitation for Ukrainian President Volodymyr Zelenskiy to come to Moscow for peace talks, as U.S.-led efforts to reach a deal to end the nearly four-year war in Ukraine intensify.
Any peace deal that would allow Russia to export more oil should increase global supplies and decrease energy prices.
Russia is the third-biggest crude producer in the world after the U.S. and Saudi Arabia, according to EIA data.
U.S. private equity firm Carlyle Group has agreed to an initial deal to buy most of Lukoil's foreign assets, which Russia's second-largest oil company is being forced to sell because of U.S. sanctions.
In other news that could boost global supplies and reduce prices, Kazakhstan said U.S. oil major Chevron would take measures to ensure the reliable and safe operation of facilities at Kazakhstan's giant Tengiz oilfield, with the aim of reaching full production in a week.
"Disruptions in Kazakhstan (CPC terminal, Tengiz field force majeure) have removed a significant number of barrels from the market," UBS analyst Giovanni Staunovo said.
In Venezuela, lawmakers are expected to discuss on Thursday a sweetened oil reform after a proposal submitted by interim President Delcy Rodriguez was modified to introduce a new hydrocarbon tax, the possibility of asset privatizations and oilfield operation outsourcing, a draft seen by Reuters showed.
On Venezuela, Exxon Mobil and Chevron executives may face more questions about their investment opportunities in Venezuela than their actual quarterly earnings when they hold calls with analysts on Friday.
DOLLAR UNDER PRESSURE
In the U.S., the dollar held near its lowest against a basket of other currencies since February 2022 on uncertainty over U.S. economic policies.
A weaker U.S. dollar can boost oil prices by making dollar-priced oil less expensive for many global buyers.
The U.S. Federal Reserve struck a more sanguine tone on the U.S. labor market and inflation risks overnight, which investors took to imply that interest rates could be on hold for longer.
Lower interest rates would reduce consumer borrowing costs and could boost economic growth and oil demand.
President Trump, who wants the Fed to lower interest rates, said he intends to announce his pick to replace Chair Jerome Powell next week.
The number of Americans filing new applications for unemployment benefits fell last week from an upwardly revised level in the prior week, suggesting layoffs remained low, but tepid hiring is stoking households' anxiety about the labor market.
Separately, analysts noted the premium of futures for Brent over WTI rose to $5.27 per barrel, its highest since April 2024.
Analysts have said that when Brent's premium over WTI rises over $4 a barrel, it generally makes economic sense for energy firms to send ships across the ocean to pick up U.S. crude, which should result in higher U.S. exports.
© 2026 Thomson/Reuters. All rights reserved.