Brent Crude Surpasses $100/bbl as Middle East Tensions Escalate

Brent crude oil futures moved above the $100/bbl mark on Wednesday, September 9, reaching the threshold for the first time since July 24 as renewed conflict in the Middle East intensified concerns over regional oil supply. Brent has risen by around 25% since early August, as expectations of a lasting resolution to the six-month-long US-Iran conflict have weakened.

At the time of writing, Brent crude was at $100.08/bbl, up $2.16, or 2.21%, while WTI crude stood at $94.74/bbl, gaining $1.71, or 1.84%.

Rising Attacks Increase Risks to Regional Oil Flows

Supply disruption concerns grew after Iran attacked a US base in Jordan and vessels near the Strait of Hormuz, while recent attacks by Iran-backed Houthis on Saudi energy facilities added to fears of a wider regional conflict. The escalation has also put crude shipments through the Red Sea at greater risk, making the route more important as flows through the Strait of Hormuz remain heavily restricted.

According to Rystad Energy, oil flows through Hormuz had recovered to around 8-9 million barrels/day in the week before fighting resumed on August 30, approximately twice the previous week's level. However, volumes have since dropped back to below 2 million barrels/day.

Analysts said the market is increasingly factoring in the possibility of a prolonged conflict and a higher risk of disruptions to Middle Eastern oil supplies. Several major banks, including Goldman Sachs, Bank of America, and HSBC, have also recently increased their crude oil price forecasts.

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