International oil prices surged roughly 4% at Thursday’s (8th) close, with Brent Crude futures climbing back above the $104-per-barrel threshold to post their highest settlement since September 29. Escalating geopolitical risk in the Middle East, combined with Hurricane Isaias bearing down on the U.S. Gulf Coast and forcing a massive shutdown of oil production, delivered a double blow that sharply intensified supply concerns across energy markets.
Brent Crude futures finished up $4.08, or 4.1%, at $104.28 per barrel (approximately NT$3,300). U.S. benchmark West Texas Intermediate (WTI) futures rose $3.21, or 3.6%, to settle at $91.49 per barrel (approximately NT$2,900). Both crude benchmarks at one point surged more than $5 intraday, underscoring the heightened tension in trading sentiment.
Market participants noted that two forces were simultaneously driving the sharp rally. First, Middle East tensions flared once again, with markets worried that the U.S. could launch a military strike against Iran, putting the Strait of Hormuz—the world’s most critical oil shipping artery—at risk of disruption. Second, Hurricane Isaias was expected to make landfall along the U.S. Gulf Coast on Friday, prompting oil and natural gas producers in the region to carry out large-scale evacuations and shut down production platforms ahead of the storm.
Supply Disruption Scale Continues to Expand
According to data released Thursday by U.S. offshore mineral management agencies, oil and natural gas producers in the Gulf of Mexico had shut in approximately 1.3 million barrels per day of oil production as of that date, equivalent to 62.9% of the region’s current oil output. This figure marked a significant expansion from the prior day’s shutdown levels, reflecting the rapidly escalating severity of the hurricane threat.
Hurricane Isaias was moving toward U.S. offshore oil production areas, forcing companies to shut down offshore platforms. Market analysts believe that if the hurricane’s path holds, oil supply disruptions in the Gulf of Mexico could persist for several days or even longer.
Trump’s Stance and Iran’s Response
Oil prices pulled back from intraday highs, largely influenced by remarks from U.S. President Donald Trump. Trump stated that Washington was engaged in productive discussions with Iran and pledged not to attack Iran before the U.S. midterm elections conclude on November 3. The comments provided some relief to markets concerned about an imminent military conflict.
Iran’s response also drew attention. Iranian Foreign Minister Abbas Araghchi said Tehran was reviewing the U.S. response to Iran’s proposal. The proposal calls for reopening the Strait of Hormuz within seven days, and Iran indicated it would respond within a matter of days.
However, even as diplomatic dialogue appeared to show progress, the U.S. Treasury Department imposed a fresh round of sanctions on Iran on Thursday. The sanctions targeted individuals, networks, and 17 vessels involved in transporting Iranian crude oil, petroleum products, and petrochemicals, aimed at further intensifying economic pressure on Tehran. The contradictory signals of sanctions running parallel to diplomatic dialogue have kept markets on high alert regarding the trajectory of the Middle East situation.
Dual Uncertainty: Geopolitics and Natural Disaster
The compounding effect of Middle East tensions and the hurricane threat has exposed energy markets to a rare double supply risk. The Strait of Hormuz is a critical chokepoint through which roughly one-fifth of the world’s oil shipments pass; a blockade would have a far greater impact on global energy supply than any single regional hurricane. Meanwhile, the Gulf of Mexico is the most important offshore oil production base for the United States. While hurricane-season supply disruptions are a seasonal phenomenon, this year’s hurricane activity has been stronger and more frequent than the historical average.
Crude Oil FuturesSettlement Price (USD/barrel)ChangeBrent Crude104.28+4.1%West Texas Intermediate (WTI)91.49+3.6%
Note: Both crude benchmarks surged more than $5 intraday; Brent Crude touched its highest level since September 29 during the session.
From a supply-demand fundamentals perspective, the shutdown of approximately 1.3 million barrels per day in the Gulf of Mexico represents a substantial share of total U.S. oil production. If output cannot be restored quickly in the short term, it will put pressure on domestic U.S. fuel supplies. On the other hand, the escalation of Iran sanctions could further tighten global crude supply, particularly given that Iranian crude exports are already under strict restrictions.
Market analysts note that oil prices in the near term will hinge heavily on two variables: first, the actual extent of damage after Hurricane Isaias makes landfall and the speed of production recovery; and second, whether U.S.-Iran diplomatic talks can achieve substantive progress in the coming days. If the Strait of Hormuz reopening proposal receives a positive response from Iran, the geopolitical risk premium could quickly dissipate. Conversely, if negotiations break down and military confrontation escalates, oil prices could climb even higher.
For investors, volatility in energy stocks is expected to rise significantly in the near term. If oil prices remain firmly above the $100 mark, it will create renewed pressure on global inflation expectations and could influence the monetary policy paths of central banks worldwide. Industries sensitive to fuel costs, such as aviation and transportation, may face mounting cost challenges.