Brent Crude Nears $100 as Middle East Conflict Escalates
The conflict in the Middle East has driven oil prices higher, with Brent crude nearing $100 per barrel. The escalation of attacks on US and Iranian forces, as well as shipping routes responsible for moving crude out of the Gulf, is behind this increase.
US forces destroyed five Iranian oil tankers on Tuesday after Iran attempted to strike US naval vessels with ballistic missiles. Tehran subsequently retaliated against a US military base in Jordan and claimed attacks against vessels attempting to transit the Strait of Hormuz. This has added further premium into oil prices, which have climbed roughly 25% since early August.
The conflict is spreading beyond Hormuz, however, as Iran-backed Houthi forces launch drone and missile attacks against Saudi energy facilities. This threatens one of the principal alternatives to moving barrels through the Strait, as Saudi Arabia has been diverting some crude westwards towards the Red Sea.