Middle Eastern Tensions Send Brent Crude Price Soaring Past $100
Brent crude oil futures broke through the psychological threshold of $100 per barrel on September 9, with U.S. crude trading at approximately $94.
The market move was driven by the simultaneous escalation of two supply disruption risks in the Middle East: clashes between Yemen's Houthi rebels and Saudi Arabia, which caused around 73 injuries, fires at energy facilities, and temporary shutdowns, including the Jizan refinery with a design capacity of roughly 400,000 barrels per day; and U.S. forces striking five Iranian oil tankers near Kharg Island and in the Gulf of Oman.
Markets interpreted these events as a repricing of transit risk premiums. Shell International believes that with Brent hovering near $100, regional developments necessitate the continued inclusion of a significant risk premium.