SINGAPORE: Brent crude prices climbed above the $100-a-barrel mark on Wednesday for the first time since July 24, as the intensifying conflict in the Middle East raised fresh concerns over disruptions to regional oil supplies.
Brent futures gained $2.15, or 2.2%, to $100.07 a barrel by 0721 GMT. US West Texas Intermediate (WTI) also advanced, rising $1.70, or 1.83%, to $94.73 a barrel.
The latest surge has pushed Brent prices roughly 25% higher since the beginning of last month, as expectations of a lasting settlement to the six-month-old US-Iran conflict have weakened.
Market concerns intensified after Iran-backed Houthi forces attacked Saudi energy infrastructure this week, with several oil facilities reportedly catching fire. The attacks have heightened fears that the conflict could spread further and disrupt critical crude transportation routes.
Analysts are particularly concerned about possible disruptions in the Red Sea, which has served as an alternative route for oil shipments amid restrictions on traffic through the strategically important Strait of Hormuz.
Oil flows through Hormuz have fallen sharply since the Iran conflict began on February 28. Rystad Energy Chief Economist Claudio Galimberti said around 8 million to 9 million barrels per day passed through the strait in the week before fighting resumed on August 30—about twice the previous week’s volume. More recently, flows have dropped below 2 million barrels per day.
Several major financial institutions, including Goldman Sachs, Bank of America and HSBC, have responded to the growing supply risks by raising their oil price forecasts.
Although non-OPEC producers such as the United States, Canada and Guyana have increased production, the International Energy Agency warned last month that global oil supply could decline by around 4.3 million barrels per day this year, equivalent to roughly 4%.
The latest developments have added further uncertainty to the global energy market, with traders closely monitoring the conflict for signs of additional disruptions to crude production and transportation.
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