Oil prices surged on Iraq drone strikes, supply disruptions heightened market jitters

Global crude oil prices rallied sharply on Thursday, with both Brent and West Texas Intermediate (WTI) benchmarks climbing over 1%, as escalating geopolitical tensions in the Middle East renewed fears over regional supply stability.

Brent crude futures settled at $69.52 a barrel, gaining $1.00, or 1.46%

WTI crude rose $1.16, or 1.75%, to close at $67.54 a barrel. 

The upswing follows a fresh wave of drone attacks targeting oil fields in the semi-autonomous Kurdistan region of Iraq—marking the fourth consecutive day of strikes.

Two energy officials confirmed that output from Kurdistan has been slashed by 140,000 to 150,000 barrels per day, more than half the region’s typical production of around 280,000 bpd. The sustained attacks have not only curtailed local supply but also deepened concerns over the vulnerability of key oil-producing assets across the wider Middle East.

Beyond the geopolitical front, broader market sentiment also lent support to oil prices. Strong US economic data helped lift risk appetite, fuelling a global equity rally and easing concerns about a potential slowdown in the world’s largest economy.

Adding further bullish momentum, data from the U.S. Energy Information Administration (EIA) revealed that domestic crude inventories dropped by 3.9 million barrels last week—significantly more than the modest 552,000-barrel draw predicted by analysts in a Reuters poll.

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