Khaberni - Oil prices increased on Thursday as concerns grew about the prolonged closure of the Strait of Hormuz, as the war between the United States and Iran hampers oil and gas flows from the Middle East, while supply remains limited with production facilities cutting their levels.
Brent crude rose $1.67 or 2.05 percent to $83.07 a barrel by 0141 GMT. U.S. West Texas Intermediate crude climbed $1.94 or 2.60 percent to $76.60.
The scope of the war between the United States and Iran expanded on Wednesday after an American attack targeted an Iranian warship off the coast of Sri Lanka, while Republicans in the Senate supported the military campaign ordered by President Donald Trump against Iran.
They voted against a resolution that aimed to stop the war and required obtaining authorization from Congress before launching any military actions.
Officials stated that Iraq, the second-largest crude oil producer in OPEC, cut its production by about 1.5 million barrels per day due to a lack of storage facilities and the halt of a vital export route.
Qatar, the largest producer of liquefied natural gas in the Gulf, declared a force majeure on gas exports on Wednesday, while sources stated that returning to normal production levels might take at least a month.
Shipping movements through the Strait of Hormuz, a major passage for nearly a fifth of the world's energy consumption, were nearly completely halted for the fifth consecutive day during the war on Iran and the subsequent Iranian response.
J.P. Morgan in a client memo stated that Iran had refrained from targeting most of the vital energy infrastructure, but kept shipping risks at very high levels, noting that its estimates indicate that about 329 oil tankers are stuck in the Gulf.
He added "Storage capacities in the Gulf Cooperation Council countries and prevailing energy prices are factors that limit the duration of the American campaign."
