Middle East Conflict Drives Oil Prices Above $100 Amid $150 Forecast
Oil prices have surged above $100 a barrel due to concerns over supply disruptions in the Middle East. The current conflict between Saudi Arabia and Houthi rebels has raised fears of a shutdown of the Bab el-Mandeb Strait, which handles about 5% of global oil shipments.
The situation around the Strait of Hormuz has also worsened after recent attacks on tankers linked to Iran's Islamic Revolutionary Guard Corps. This has added weight to the view that average oil prices in the fourth quarter will rise well above $100 a barrel, with some investment banks forecasting Brent crude could reach as high as $150.
Despite these concerns, some analysts believe gains may be capped at around $100 to $120 a barrel due to higher output from non-OPEC producers such as the U.S. and Canada, and a structural decline in China's oil demand.