Middle East Tensions Push Oil Prices Above $100
Oil prices have surged above $100 per barrel for the first time since July 24 as tensions in the Middle East escalate. Brent crude futures rose by 2.05% to $99.93 a barrel, while US West Texas Intermediate crude increased by 1.60% to $94.52 a barrel.
The rise comes as attacks on Saudi energy facilities by Iran-backed Houthis have threatened oil shipments via the Red Sea and the Strait of Hormuz. The conflict has disrupted oil flows, with Rystad Energy's Chief Economist Claudio Galimberti citing a recent drop in volume through Hormuz to below 2 million barrels per day.
Market experts warn that prices may continue to rise as the risk of a prolonged conflict and disruptions to oil shipments remains. 'The market is trying to treat this rise in energy prices as a one-off,' said Jeffrey Currie, co-chairman at Abaxx Markets. 'It's not. This is structural. It's not going away, and it's part of what I would argue as a security premium. And it's only going to get bigger.'
Goldman Sachs, Bank of America, and HSBC have recently raised their crude price forecasts in response to the escalating tensions.