Oil prices rise on escalation in Middle East

By Shadia Nasralla

LONDON, Sept 3 (Reuters) - Oil ‌prices rose on ​Thursday ​after U.S. strikes on Iran and renewed Israeli threats against Tehran revived concerns about disruptions to Middle East supplies.

Brent crude futures were up 59 cents, or 0.62%, ‌at $96.22 a barrel by 1327 GMT while U.S. West Texas Intermediate crude futures ⁠rose 78 cents, or 0.86%, to $91.79. Both contracts were heading for their fourth day of gains and hit six-week ‌highs earlier in the session.

Iran's health ‌minister said 18 people were killed and 108 wounded in Tuesday night's U.S. strikes across Iran. The Iranian Red Crescent said four people were killed and 67 wounded at a ​wedding ceremony near the coast of the Strait of Hormuz.

Three Iranian Army pilots were killed in the U.S. strikes, the semi-official Tasnim news agency reported.

The attacks were the most substantial exchange ⁠of fire between the U.S. and Iran since July. The war, which began with U.S.-Israeli strikes at the end of February, ​is in its seventh month.

Israeli Defence Minister Israel Katz renewed warnings that Israel would "cripple" Iran's military and civilian infrastructure, including energy facilities, if Tehran ​launched attacks against it.

Saxo Bank analyst Ole Hansen said ‌Katz's comments had helped to push oil prices higher.

FEWER VESSELS TRANSIT STRAIT

Six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 ⁠a day earlier and well below the 10-day average of around 13, preliminary shipping data showed on Thursday.

"The oil market remains tight, with oil inventories still declining globally translating into higher prices. Some support might have ⁠also come from ongoing tensions in the Middle East," said UBS energy analyst Giovanni Staunovo.

Meanwhile, Iran added ships to ​the list of vessels it deems non-compliant and subject to fines, confiscation or detention if they try to sail through the strait.

Iraqi vessels are among those Iran has allowed to pass through Hormuz.

Iraq increased its oil ‌exports to around 2.34 million barrels per day in August from about 1.35 million bpd in July, two Iraqi energy officials said on ‌Wednesday, with September exports also expected to increase as heavy discounts and Iranian approvals for Iraqi tankers encouraged ⁠buyers.

Higher oil prices and the implications ‌for inflation led to increased ​bets on a Federal Reserve interest rate hike this month. [MKTS/GLOB]

(Additional reporting by Sam Li and Colleen Howe; Editing by Sharon Singleton, Jacqueline Wong, Susan Fenton and ‌Barbara Lewis)

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