Brent crude prices climbed above $100 a barrel on Wednesday for the first time since July as escalating military confrontation between the United States and Iran heightened concerns about disruptions to global oil supplies.
Brent crude futures rose about 2.2% to $100.07 a barrel by 0721 GMT, while US West Texas Intermediate crude gained 1.83% to $94.73. Brent has risen by about 25% since the beginning of August.
The latest increase followed a fresh escalation in the conflict after the US military said it had destroyed five Iranian oil tankers following attempted Iranian attacks on US naval assets.
Iran subsequently launched missile attacks on US and allied targets, while its Revolutionary Guard threatened commercial shipping operating in the region.
The developments have intensified concerns over the Strait of Hormuz, a critical global oil chokepoint through which millions of barrels of crude and petroleum products normally pass each day.
Oil flows through the strait have fallen sharply since the conflict began on February 28. Before the latest escalation, flows had recovered to about 8 million to 9 million barrels per day, but more recently they had dropped below 2 million barrels per day, according to Rystad Energy.
The supply concerns have also spread beyond the Gulf. Iran-backed Houthi forces have launched attacks on Saudi Arabia, including strikes that damaged energy infrastructure in the kingdom.
The attacks threaten another important route for oil shipments through the Red Sea and add to concerns that the conflict could spread across the region.
The combination of restricted flows through the Strait of Hormuz and attacks on Saudi energy infrastructure has increased the risk of a prolonged global supply squeeze.
Several major banks have raised their oil price forecasts in recent days as expectations of a quick resolution to the conflict have weakened. Goldman Sachs, Bank of America and HSBC are among the institutions that have revised their outlooks higher.
The International Energy Agency has also warned of a significant reduction in global oil supply this year. It expects worldwide supply to decline by about 4.3 million barrels per day, or roughly 4%, despite increased production from countries including the United States, Canada and Guyana.
The renewed oil price surge could increase inflationary pressure globally by raising fuel, transportation and production costs.
For major oil-consuming economies, sustained prices above $100 could complicate monetary policy decisions as central banks balance inflation risks against weaker economic growth.
The latest rally therefore marks a significant shift for energy markets, with investors increasingly focused on how long the US-Iran conflict will last and whether disruptions to Middle Eastern oil exports will deepen.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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