US-Iran Tensions Drive Oil Prices Toward $100 Barrel Mark

Oil prices are approaching $100 a barrel due to escalating hostilities between the US and Iran, which is exacerbating supply concerns. The price of Brent crude rose above $98 a barrel for the first time since late July after US strikes on three Iranian oil tankers over the weekend in retaliation for Iranian missile attacks on two US Navy warships.

Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said the market will now watch for signs of disruption to oil shuttling services. Daan Struyven, co-head of global commodities research at Goldman Sachs, warned that Brent could reach $120 a barrel if shipping attacks broaden and intensify.

Energy Aspects noted that commodity funds are turning bullish as they believe a tipping point in global reserves is approaching. Oil reserves outside China have fallen by over 400mn barrels since the Iran war began, and the volume of oil in tankers at sea is at multiyear lows.