Oil Surges Past $104 Brent as Hurricane Isaias Shuts 63% of Gulf Output and Hormuz Attacks Escalate

Oil prices surged more than 4% on Thursday as two simultaneous supply shocks hit global energy markets: Hurricane Isaias knocked out more than 1.28 million barrels per day of U.S. Gulf of Mexico oil production, while Iranian vessel attacks in the Strait of Hormuz intensified, with reports of explosions near tankers in the southern strait late in the session. Brent crude settled at $104.28 per barrel, up $4.08 or 4.07%, and WTI November futures closed at $91.49, up $3.21 or 3.64%. RBOB gasoline futures rose 4.52% and diesel futures climbed roughly 50 cents from Tuesday morning levels.

The Marine Minerals Administration reported that 62.89% of Gulf oil output and 57.35% of natural gas production had been shut in as of 11 a.m. CDT Thursday, based on operator reports. Operators evacuated personnel from 121 of the Gulf's 371 manned production platforms, or 32.61%, along with five non-dynamically positioned rigs. The shutdown accelerated sharply from just 185,120 barrels per day two days earlier. Nearly 500,000 barrels per day of oil-refining capacity also sits in Isaias's projected path, and Jefferies warned of a potential "fuel supply event" given that the U.S. fuel market already has limited slack. Nationally, gasoline averaged $4.36 per gallon as of Wednesday according to AAA, while diesel, which set an all-time record in September, stood at approximately $6.28 per gallon.

Hurricane Isaias, the first hurricane of the 2026 Atlantic season, was expected to strengthen further before making landfall along the northern Gulf Coast late Friday or early Saturday, bringing damaging winds, life-threatening storm surge and the risk of tornadoes across Florida and Alabama. The National Hurricane Center urged residents to rush storm surge and wind preparations to completion Thursday.

On the geopolitical front, escalating Iranian attacks on tankers transiting the Strait of Hormuz added a separate premium to prices. Freight costs for shipping crude out of the Middle East surged alongside the conflict, and a Fars News Agency report cited military sources saying powerful explosions struck tankers in the southern Hormuz strait Thursday evening, attributed to mines in the area. A separate analysis noted that overall oil flows through the region remain roughly 6 million barrels per day below pre-war levels on a sustained average basis, though Iran's attack tempo appears linked to the volume of vessel traffic rather than a strategic shift in negotiations.