Oil Prices Surge Over $94 Amid Iran Tensions, Bakken Differential Narrows

Oil prices rose sharply on Thursday, with West Texas Intermediate (WTI) crude trading at $94.65 per barrel, a gain of $1.69 or 1.82%, according to live market data. Brent crude, the international benchmark, climbed to $103.81, up $1.90. The price move extends gains from the prior session, driven by escalating tensions in the Middle East.

The primary catalyst is a stalled standoff between the U.S. and Iran, which has severely disrupted crude flows through the Strait of Hormuz. According to Rigzone, peace talks have failed to materialize, and Iranian gunboats fired on commercial vessels in the vital waterway on Wednesday. The U.S. has maintained a naval blockade, with President Donald Trump stating on Truth Social that lifting it would preclude a deal.

Traffic through the strait, which normally carries one-fifth of global crude, remains at a near-halt. The Pentagon has reportedly informed Congress it could take six months to clear mines deployed by Iran, Rigzone reported. This ongoing disruption continues to inject volatility and a geopolitical risk premium into markets.

U.S. inventory data provided a mixed fundamental picture. The Energy Information Administration (EIA) reported that commercial crude stocks rose by 1.9 million barrels to 465.7 million for the week ending April 17, putting inventories about 3% above the five-year average. However, refined product stocks drew down significantly, with gasoline inventories falling 4.6 million barrels and distillates dropping 3.4 million barrels.

For Bakken operators, the high-price environment is spurring action, though cautiously. The Bakken crude differential to WTI was $-3.42 on Thursday. According to a report from Bing News, North Dakota's crude output is set to climb as operators respond to prices.

Nathan Anderson, director of the North Dakota Department of Mineral Resources, said operators that had previously shut in wells are bringing production back online. The state has seen a 13% increase in workover rigs, from 110 to 125, as companies optimize existing wells rather than commit to expensive new drilling campaigns.

"The drilling rigs is a different story…I think operators are cautious to pick up rig activity because they don’t understand the duration of this," Anderson said, citing uncertainty around the Iran war. One operator is set to add a rig and frac crew in July, but the current count of hydraulic fracturing crews in the state remains at ten.

North Dakota oil production rose by 4,000 barrels per day to 1.13 million bpd in February, with a further increase expected for March. Operators are looking at futures prices, which for delivery six months from now were trading around $76.50 as of Tuesday—significantly lower than prompt prices—informing their cautious approach to long-term capital commitments.

Natural gas prices moved against the trend, trading at $2.73, down $0.13 on the day.