Brent Jumps 5% to $105.3 Amid Middle East Tensions and US Hurricane

Brent crude jumped over 5 percent to $105.3 a barrel on Thursday, marking the oil benchmark's largest daily increase in weeks, according to a report by The Guardian. The newspaper attributed the rise to escalating tensions in the Middle East on one hand, and supply pressure resulting from a hurricane off the US coast on the other, combining geopolitical and weather risks simultaneously.

The newspaper mentioned that a report in The Atlantic magazine stated the White House asked the Department of Defense, the Pentagon, to prepare options for strikes against Iran ahead of the US midterm elections scheduled for next month. According to the newspaper, this report represented one of the drivers that raised the risk premium on crude prices during the session.

The Guardian pointed out that attacks on oil tankers in the Strait of Hormuz reached their highest levels since the start of the war, raising fears of disruption to one of the world's most critical energy transit points. A significant portion of Gulf crude exports bound for Asian and European markets passes through the strait, making any escalation there directly reflected in prices.

On the US front, Tropical Storm Isaias upgraded into the first hurricane of this year's Atlantic season, according to the newspaper, threatening production platforms and refineries along the US coastline. This factor adds pressure to the supply side at a time when the market is already suffering from geopolitical concerns, explaining the magnitude of the rise in a single session.

What do these terms mean?

Brent Crude: The benchmark crude oil blend extracted from the North Sea, used globally to price about two-thirds of the world's crude oil supplies.

Strait of Hormuz: A narrow waterway between the Gulf and the Gulf of Oman through which a major portion of global oil exports passes; any disruption there raises energy prices.

Geopolitical Premium: The increase in oil price resulting from political risks and wars, rather than an actual change in supply and demand.

Hurricane: A tropical storm whose wind speed intensifies beyond a certain threshold, typically leading to the evacuation of offshore production platforms and a temporary halt in pumping.