Oil Extends Rally As US-Iran Tensions Escalate

(RTTNews) - Oil extended gains for a third consecutive session on Thursday to hit a fresh four-month high, driven by a weaker dollar, looming Iran concerns and disruption to crude production and exports from the U.S. Gulf Coast.

Benchmark Brent crude futures surged 2 percent to $68.69 a barrel while WTI crude futures were up 1.9 percent at $64.38.

Both contracts are up nearly 5 percent since Monday and are trading at their highest levels since September 29.

There are fresh concerns over supply disruptions after U.S. President Donald Trump warned Iran to agree to a nuclear deal or face potential military action.

In response, Iran's Foreign Minister Abbas Araghchi said the country's armed forces were ready "with their fingers on the trigger" to "immediately and powerfully respond" to any aggression by land or sea.

Iran is OPEC's fourth-largest producer, pumping around 3.2 million barrels per day. The upside in oil prices has also been supported by a weaker dollar, tight Kazakh supply and data showing a surprise drop in U.S. crude inventories.

The dollar weakened, halting Wednesday's bounce, as concerns over the Federal Reserve's independence, combined with ongoing fiscal pressures and tariff worries overshadowed comments from U.S. Treasury secretary Scott Bessent that Washington was still pursuing a "strong dollar policy".

Kazakhstan has begun restarting production in phases, but its energy minister indicated output is likely to remain within OPEC+ quotas due to the recent decline.

Crude oil inventories in the United States decreased by 2.3 million barrels during the week ending January 24, according to new data from the U.S. Energy Information Administration (EIA) released on Wednesday.

A day before, the American Petroleum Institute reported that crude oil inventories fell by 247,000 barrels.