New Delhi

Brentcrude oil prices climbed above $105 a barrel on Thursday, reaching their highest level since May 25, as renewed fighting between the US and Iran raised concerns over prolonged disruptions to global energy supplies. Strong Chinese buying and a sharp decline in Saudi Arabia’s oil output added further momentum to the rally.

Brent crude futures were up 2.63 per cent at $104 a barrel at 5:55 pm IST, extending a rally that pushed the global benchmark above the $100 mark in the previous session for the first time since July. The latest surge has renewed fears that a prolonged conflict in the Middle East could fuel energy-driven inflation, with natural gas and diesel prices also rising sharply.

The conflict has intensified over the past week after a period of relative calm, with little indication of an immediate de-escalation. A senior Iranian official said Tehran has no intention of backing down in the face of a US naval blockade and would escalate attacks if Washington continues striking Iranian territory.

US President Donald Trump has also indicated that the conflict could continue until after the November midterm elections, while warning that significant relief in gasoline prices may not come before then. The comments have reinforced expectations that the conflict, now in its seventh month, could continue to exert pressure on energy markets.

Brent prices have risen about 30 per cent from lows recorded in early August after efforts to secure a permanent agreement between the US and Iran to halt attacks failed to materialise. Fighting resumed later in August, adding to concerns over the security of crude supplies from the Gulf region.