Middle East Conflict Drives Oil Prices Above $100 Per Barrel

Oil prices have surged above $100 per barrel for the first time in nearly four months, driven by escalating attacks on key shipping routes in the Middle East. The recent spike has seen both Brent and WTI crude benchmarks rise by over 6% on Thursday, with weekly gains nearing 13%. The rally's durability will depend on China, the world's largest crude importer, which could amplify the impact of supply disruptions and drive prices higher.

The escalating Middle East conflict has disrupted shipping routes, particularly Yemen's port of Mocha, and raised fears of prolonged supply disruptions. Analysts say that events are spiraling out of control, and Iran is willing to stretch this conflict as wide and as long as it can. The U.S. President Donald Trump warned that the war would end after the November midterm elections.

OPEC has downgraded its 2026 global oil demand-growth forecast for the fourth consecutive month, signaling softer fundamentals. Yet market sensitivity remains high as analysts watch China's import demand for signs of further upside. The average U.S. diesel price surpassed $6 per gallon for the first time, due to supply constraints from the U.S.-Iran war and other geopolitical tensions.