Brent Crude Tops $100 as Middle East Tensions Fuel Oil Price Surge
Brent crude oil futures rose above $100 a barrel for the first time since July 24, hitting a six-week high as tensions in the Middle East intensified.
The conflict has disrupted oil flows from the region, causing prices to surge by a quarter since early last month. The latest attacks by Iran-backed Houthis on Saudi energy facilities have threatened to expand the conflict and disrupt crude shipments via the Red Sea, which has become an alternative route due to the crisis in the Strait of Hormuz.
Market participants are pricing in a prolonged conflict and the risk of military strikes disrupting oil flows. As a result, Brent crude prices are expected to remain high, with some banks raising their price forecasts in recent days. Despite efforts by non-OPEC producers like the US, Canada, and Guyana to increase output, global oil supply is expected to fall this year by 4.3 million bpd, or 4%, according to the International Energy Agency.