Oil Prices Surge Above $100 as Middle East Tensions Escalate
Oil prices are set to end the week above $100 for the first time in nearly four months, driven by increasing attacks on key shipping routes in the Middle East. Brent crude futures rose 81 cents to $108.44 a barrel, while U.S. West Texas Intermediate crude rose 69 cents to $103.17 a barrel.
The rise is attributed to Iran-aligned Houthis seizing control of Yemen's port of Mocha on Thursday, posing a further threat to Red Sea traffic. The Strait of Hormuz remains restricted due to tanker attacks in the region, with flows well below pre-war levels.
Analysts warn that supply disruptions could lead to prolonged price increases, with ING saying 'the situation has become fragile.' OPEC lowered its forecast for world oil demand growth by 380,000 barrels per day, marking the fifth straight downward revision.
Phillip Nova analyst Priyanka Sachdeva cautioned that 'the next leg in oil will depend less on headlines and more on whether physical flows improve or deteriorate further.'