Oil prices climbed above $100 a barrel on Wednesday for the first time since July 24, as the escalating conflict in the Middle East raised fresh concerns about supplies from the region.
Brent crude futures rose $2.15, or 2.2 percent, to $100.07 a barrel by 0721 GMT. US West Texas Intermediate (WTI) crude also gained $1.70, or 1.83 percent, to $94.73 a barrel.
Brent has now gained about 25 percent since early last month as hopes for a lasting end to the six-month-old US-Iran conflict continue to fade.
The latest concern came after Houthi attacks on Saudi energy facilities this week set oil installations on fire. The attacks have increased fears that the conflict could spread further and disrupt more energy infrastructure.
They could also put pressure on crude shipments through the Red Sea, an important alternative route to the Strait of Hormuz. Oil flows through the strategic waterway have already fallen sharply since the Iran war began on February 28.
Before fighting resumed on August 30, around 8 million to 9 million barrels of oil per day were moving through the Strait of Hormuz, according to Rystad Energy Chief Economist Claudio Galimberti. That was about twice the previous week’s flow.
However, volumes have since dropped below 2 million barrels per day, highlighting the growing risk to global oil supplies.
The supply concerns have also prompted several major banks to raise their oil price forecasts. Goldman Sachs, Bank of America and HSBC have all lifted their expectations in recent days.
Higher output from non-OPEC producers such as the United States, Canada and Guyana could provide some relief. But the International Energy Agency said last month that global oil supply was still expected to fall by 4.3 million barrels per day this year, equal to about 4 percent.
The latest price surge shows how quickly the Middle East conflict can affect global energy markets. If disruptions continue, higher crude prices could put further pressure on fuel costs and inflation in oil-importing countries.
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