The Brent crude oil price climbed above $100 a barrel on Wednesday, reaching its highest level in six weeks as escalating conflict in the Middle East increased concerns about disruptions to global oil supplies.
Brent futures rose $2.77, or 2.83%, to $100.69 a barrel by 10:33 a.m. GMT after briefly reaching $100.95. U.S. West Texas Intermediate crude also advanced, rising $2.18, or 2.34%, to $95.21 a barrel.
The move came as military attacks intensified across the region, adding to concerns that oil shipments through key routes could face further disruption.
Middle East Conflict Raises Oil Supply Risks
Attacks this week by Iran-backed Houthis on Saudi energy facilities set oil installations ablaze and raised concerns about a broader escalation. The attacks also threatened crude shipments through the Red Sea, an important alternative route to the Strait of Hormuz.
Oil flows through the Strait of Hormuz have already been severely reduced. Before fighting resumed on Aug. 30, about 8 million to 9 million barrels per day had moved through the waterway, according to Rystad Energy. More recently, flows had fallen below 2 million barrels per day.
The latest escalation includes U.S. strikes on multiple Iranian oil tankers, while Iran targeted a U.S. base in Jordan and attacked ships, according to the report. The developments have increased market concerns that the conflict could last longer and further restrict oil supplies.
Physical Oil and Fuel Prices Already Above $100
Although Brent futures crossed the $100 mark Wednesday, physical oil prices had already moved above that level. The dated Brent benchmark has traded above $100 per barrel since Sept. 3, according to LSEG data.
Refined fuel markets are also under pressure. European diesel futures were trading near $199 a barrel Wednesday and have remained above $100 since the start of the Iran war.
Diesel refining margins reached record levels in August as fuel shortages tightened markets, while European gasoline has also remained above $100 since March.
U.S. consumers have already faced elevated fuel costs, with gasoline reaching record levels over the Labor Day holiday weekend and diesel prices hitting all-time highs the previous week.
Oil Forecasts Move Higher
The latest rise in the Brent crude oil price comes as several major banks have raised their crude price forecasts in recent days, reflecting growing concerns about prolonged disruptions to Middle Eastern supplies.
Market analysts are watching whether attacks on oil tankers will reduce ship-to-ship transfers in the Gulf of Oman, which have helped keep global oil markets supplied despite disruptions elsewhere.
Higher oil and fuel prices could also complicate efforts by central banks to control inflation, adding another economic consequence to the worsening supply outlook.