Oil Prices Surge 6% to $107 as Shipping Attacks Heighten Supply Risks
Major benchmarks jumped over 5% on Thursday, with Brent touching $107 per barrel amid renewed Houthi attacks and ongoing Strait of Hormuz tensions, raising concerns over global oil supply.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Oil & Gas sector gains from higher crude prices – Buy bias on related tickers.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- Oil & GasPositively affected
- PowerPositively affected
- FertilizerPositively affected
Companies
Mentions in This Briefing
Sectors: Oil & Gas, Power, Fertilizer — Positive · Buy bias. PSX tickers: PPL, OGDC, HUBC. Oil & Gas sector gains from higher crude prices – Buy bias on related tickers.
Full Story
Open on Business Recorder## Price Spike
Oil markets rallied sharply on Thursday, with Brent crude futures climbing $5.87 (5.8%) to $107.08 a barrel and U.S. West Texas Intermediate (WTI) rising $5.57 (5.8%) to $101.62. Both benchmarks breached the $100 mark for the first time since May, marking the steepest one‑day gain since the Iran‑U.S. conflict began.
## Geopolitical Drivers
The surge was fueled by a wave of attacks on commercial shipping. The Houthi rebels seized Yemen’s Mocha port, threatening Red Sea traffic, while tanker assaults in the Strait of Hormuz intensified. Iran also reported attacks on ten vessels near the strait after the U.S. targeted five Iranian tankers. These developments have expanded the perceived risk from a single choke‑point to a broader regional threat to oil export routes and production facilities.
## Market Commentary
Simon‑Peter Massabni of XS.com warned that the risk of disruption now spans multiple export corridors, not just the Hormuz bottleneck. S&P Global Energy noted that the market is moving into a “new normal” where supply interruptions are expected to be persistent rather than episodic.
## Demand Outlook
Analysts highlighted China’s role as a decisive factor. Recent upticks in Chinese crude purchases have supported prices, but any pull‑back could temper the rally. ING analysts cautioned that continued Chinese buying could amplify the impact of supply shocks, while a slowdown would likely dampen price gains.
## Inventory and Production Data
U.S. crude inventories fell by 391,000 barrels to 424.1 million, a sharper draw than the 1.55‑million‑barrel decline analysts had forecast. OPEC lowered its 2026 oil‑demand growth forecast to 380,000 barrels per day and reported a 640,000‑bpd drop in output for August, reflecting the ongoing supply constraints.
## Implications for Pakistan
Higher global oil prices benefit Pakistan’s upstream oil‑and‑gas companies, improving revenue prospects and potentially supporting dividend payouts. The rise also raises input costs for power generators and fertilizer producers, which could compress margins if pass‑through mechanisms are limited.