Oil jumped above $100 per barrel on Wednesday as escalating fighting in the Middle East raised fears of further supply disruptions.
Early in European trading, Brent crude, the global benchmark, tipped above $100, and by around 9:40 a.m. ET, was trading at $100.90 per barrel. The move above $100 was the first since July 24.
At the same time, WTI, the US benchmark, was at just below $96 per barrel.
Brent has climbed about 25% since early August as hopes for a lasting end to the six-month US-Iran conflict have faded. American forces attacked Iranian tankers after Tehran tried to strike a US Navy warship with ballistic missiles, the US military said on Wednesday.
Attacks by Iran-backed Houthi militants this week also set Saudi energy facilities on fire, adding to concerns about oil shipments through the Red Sea and the Strait of Hormuz.
The international benchmark previously peaked at $126 a barrel in April before falling back as hopes of a ceasefire grew.
The Strait of Hormuz remains central to traders’ concerns. Flows through the waterway recently fell below 2 million barrels a day, Rystad Energy estimated, down from 8 million to 9 million barrels a day in the week before fighting resumed on August 30.
Although producers including the US, Canada, and Guyana have increased output, the International Energy Agency said last month that global oil supply was expected to fall by 4.3 million barrels a day this year, or roughly 4%.
Major banks have responded to the worsening supply picture by lifting their price forecasts. Goldman Sachs, Bank of America, and HSBC are among the firms that have raised their outlooks in recent days.
Higher oil prices can filter through the economy by increasing gasoline, shipping, and manufacturing costs. A sustained move near or above $100 could add to inflation pressure and complicate the outlook for interest rates.
