Brent Crude Surges Past $100 as Middle East Conflict Escalates

Brent crude oil futures have risen above $100 a barrel for the first time in over six weeks, reaching a new high as tensions in the Middle East escalate. The conflict has been ongoing since February 28, with Brent crude previously peaking at $126.41 on April 30.

The recent attacks by Iran-backed Houthis on Saudi energy facilities have threatened oil shipments via the Red Sea, an alternative route to the crucial Strait of Hormuz where oil flows have been severely curtailed. Market participants are pricing in a prolonged conflict and potential disruptions to oil flows from the Middle East, said Hamad Hussain, senior climate and commodities economist at Capital Economics.

Several banks, including Goldman Sachs, Bank of America, and HSBC, have raised their crude price forecasts recently. The International Energy Agency has predicted that global oil supply will fall by 4.3 million barrels per day this year, or about 4%.