Brent Oil Tops $100 as Middle East War Deepens Global Supply Fears
LONDON, UNITED KINGDOM — WEB DESK: Brent crude surged above $100 a barrel on Wednesday, crossing the psychologically important threshold for the first time since July as escalating fighting across the Middle East intensified fears of further disruption to some of the world’s most important oil supply routes.
Brent crude futures climbed $2.15, or 2.2%, to $100.07 per barrel by 0721 GMT, while US West Texas Intermediate rose $1.70, or 1.83%, to $94.73 per barrel, according to the latest Reuters market data.
The latest move represents a further acceleration from earlier Asian trading, when the original Express report put Brent at $99.38 and WTI at $94.51.
Brent Crosses $100 for First Time Since July
The move above $100 marks Brent’s first breach of the threshold since July 24, highlighting how rapidly geopolitical risk has returned to the energy market.
Brent has gained roughly 25% since early August as hopes for a lasting settlement to the six-month US-Iran conflict have faded and military exchanges have again intensified.
Oil had already reached a six-week high on Tuesday, when Brent settled at $97.92 and WTI at $93.03.
The latest rally reflects concern not merely about higher geopolitical risk but about actual and potential interruptions to crude production, tanker movements and alternative export routes.
US-Iran Fighting Escalates
A sharp escalation between Washington and Tehran has added to market anxiety.
US forces said they destroyed five Iranian oil tankers on Tuesday, describing the operation as a response to attempts by Iran’s Islamic Revolutionary Guard Corps to strike a US Navy warship with ballistic missiles.
Iran subsequently said it fired ballistic missiles at a base in Jordan used by the US military and attacked 10 ships, including US vessels, near the Strait of Hormuz.
US and Jordanian officials reported no casualties from the attack on the Jordanian base, while competing claims about damage from the broader exchanges remain subject to verification.
The rapid cycle of attacks has increasingly drawn energy and shipping assets directly into the conflict.
Saudi Energy Facilities Add to Supply Concerns
Oil markets are also reacting to attacks on Saudi Arabia, one of the world’s largest crude exporters.
Iran-aligned Houthi forces in Yemen attacked several Saudi cities on Tuesday, injuring more than 70 people and setting oil installations ablaze. Saudi aircraft later carried out strikes in Yemen, according to reports cited by Reuters.
The Saudi attacks are particularly significant because the kingdom has sought to redirect some crude exports away from the Strait of Hormuz.
If Saudi energy infrastructure and alternative routes are repeatedly targeted, the market could lose part of the flexibility it has relied upon to offset disruption around Hormuz.
That possibility has contributed to the latest price surge.
Strait of Hormuz Remains Biggest Risk
At the centre of the oil market’s concern is the Strait of Hormuz, the narrow waterway between Iran and Oman.
Before the current conflict, roughly 20 million barrels per day, equivalent to around one-fifth of global oil supply, normally moved through the route.
Flows have since become severely disrupted and increasingly difficult to measure.
Rystad Energy estimated that around 8 million to 9 million barrels per day moved through Hormuz in the week before fighting resumed on August 30. More recently, the volume had dropped below 2 million barrels per day, according to its chief economist Claudio Galimberti.
The magnitude of that decline helps explain why crude markets are responding strongly to each new military development.
Tankers Going ‘Dark’ Complicate Oil Market
Accurately determining how much oil is moving through Hormuz has also become unusually difficult.
Some vessels are switching off tracking transponders, creating so-called dark crossings, while US government and commercial shipping estimates differ significantly.
Reuters analysis found that competing estimates of Hormuz flows have become unusually wide, leaving traders, energy companies and policymakers with limited visibility into the true volume of crude moving through the world’s most important oil artery.
That uncertainty itself can support prices because traders must account for supply risks they cannot accurately quantify.
Red Sea Route Also Faces Threat
The crisis is no longer confined to Hormuz.
The Red Sea has become an important alternative route as Gulf exporters seek ways to maintain crude shipments despite disruption in the Strait.
But Houthi attacks create risks on the western side of the Arabian Peninsula as well.
Reuters noted that attacks on Saudi facilities could threaten crude shipments through the Red Sea, potentially undermining one of the key alternatives being used while Hormuz flows remain restricted.
This combination — pressure on Hormuz and increased danger around alternative routes — is particularly concerning for global energy markets.
Banks Raise Oil Price Forecasts
Major financial institutions are responding by revising their oil outlooks.
A growing number of banks, including Goldman Sachs, Bank of America and HSBC, have raised crude price forecasts as the conflict increases the probability of prolonged supply disruption.
The International Energy Agency said last month that it expected global oil supply to decline by 4.3 million barrels per day, or around 4%, this year, despite increased production from non-OPEC suppliers including the United States, Canada and Guyana.
That leaves markets particularly sensitive to further losses from major Middle Eastern producers.
$100 Oil Is More Than a Psychological Milestone
The return of triple-digit Brent has implications far beyond commodity traders.
Higher crude prices can increase petrol and diesel costs, shipping expenses, airline operating costs and manufacturing prices. For energy-importing countries, they can also widen import bills and place pressure on currencies.
Asian economies are particularly exposed because many rely heavily on imported Middle Eastern energy.
Market analyst Priyanka Sachdeva of Phillip Nova described $100 Brent as a warning level for the wider economy rather than merely a psychological market milestone.
Persistent high oil prices could also complicate central-bank efforts to control inflation.
Pakistan Faces Higher Import and Fuel Risks
For Pakistan, a sustained period of oil around or above $100 would be particularly important because the country relies heavily on imported petroleum products and energy.
The immediate domestic effect would depend on international product prices, exchange rates, taxation, government pricing decisions and the timing of imported cargoes.
However, prolonged increases in crude prices can eventually raise pressure on Pakistan’s petroleum import bill, transport costs, electricity generation expenses and inflation.
That risk is especially relevant after recent domestic fuel-price increases.
The global oil rally therefore has potentially significant consequences for Pakistan even though the current price surge is being driven thousands of kilometres away in the Gulf.
What Happens Next?
The direction of crude prices will now depend heavily on whether fighting escalates further and, crucially, whether Middle Eastern oil can continue reaching international markets.
The market will be watching Strait of Hormuz traffic, Saudi energy infrastructure, Iranian oil exports, US military operations and Houthi activity around Red Sea routes.
Additional attacks that materially reduce crude exports could push prices higher. Conversely, a credible ceasefire or sustained improvement in shipping flows could reduce some of the geopolitical premium currently embedded in prices.
For now, however, the latest market signal is clear: Brent has crossed $100 per barrel as traders increasingly price in the risk that the Middle East conflict could cause a deeper global oil supply shock.
