Brent crude briefly surpassed $100 per barrel on Wednesday morning, for the first time since July 24, at a time when the Middle East conflict is intensifying. At 8:57 AM (Lisbon time), Brent was trading at $99.83 per barrel, up 1.94%, while US crude West Texas Intermediate advanced 1.50% to $94.42 per barrel. Since early August, Brent prices have risen about 25%.
The Middle East war has been intensifying in recent days, with Iran's-backed Yemeni Houthis launching attacks on various Saudi cities, involving yet another US ally in the six-month-long conflict. In a sharp escalation, US forces attacked several Iranian oil tankers and Iran targeted a US base in Jordan and attacked warships.
Houthi attacks threaten crude shipments through the Red Sea, which has been a key alternative route to the Strait of Hormuz, where crude flows have been severely reduced since the war began. Saudi Arabia has already diverted some exports from the Strait of Hormuz, but any prolonged attacks against the kingdom could complicate efforts to keep crude flowing to global markets.
OCBC bank analysts stated that Iran's attacks on Saudi energy facilities and the subsequent destruction of five Iranian oil tankers raised concerns about a new prolonged disruption to oil supply. Priyanka Sachdeva, director of market analysis at Phillip Nova, said that a bullish dynamic is gaining strength in crude oil markets as Brent approaches the $100 per barrel mark.
