Benchmark Brent crude oil futures rose above $100 a barrel on Wednesday, reaching a more than six‑week high as the Middle East conflict intensified. The price climbed to $99.93 a barrel at 0802 GMT, after earlier touching $100.19, a symbolic threshold not breached since July 24.
U.S. West Texas Intermediate crude followed suit, trading at $94.52 a barrel, up $1.49 or 1.60%. Brent has risen by a quarter since early last month, reflecting fading hopes for a lasting resolution to the six‑month‑old U.S.–Iran war that began on February 28.
Since the conflict’s onset, Brent has surged to a peak of $126.41 a barrel on April 30. Recent attacks by Iran‑backed Houthis on Saudi energy facilities have set oil installations ablaze and threatened crude shipments via the Red Sea, a key alternative route to the Strait of Hormuz. The attacks raise the risk of fewer ship‑to‑ship transfers in the Gulf of Oman, which have so far helped keep oil prices in check.
Senior climate and commodities economist Hamad Hussain of Capital Economics said, "Market participants appear to be pricing in a more prolonged conflict in the Middle East as well as the risk that the latest escalation in military strikes disrupts oil flows from the Middle East."
Financial institutions such as Goldman Sachs, Bank of America and HSBC have recently lifted their crude price forecasts. Rystad Energy’s Chief Economist Claudio Galimberti noted that roughly 8 to 9 million barrels per day flowed through the Strait of Hormuz before fighting resumed on August 30, double the previous week’s volume, though it has since fallen below 2 million barrels per day.
Abaxx Markets co‑chairman Jeffrey Currie warned that the market may be treating the price rise as a one‑off, but he argued it is structural and part of a security premium that will only grow. Meanwhile, the International Energy Agency expects global oil supply to fall this year by 4.3 million barrels per day, or about 4%, despite non‑OPEC producers ramping up output.
As the situation develops, analysts will watch for any further disruptions to shipping lanes and the impact on global supply dynamics. Investors and traders are advised to monitor the market closely for signs of sustained price pressure.
