KEY POINTS
- Brent crude topped $100 a barrel for the first time since July 24, up 2.2 percent to $100.07, while WTI rose 1.83 percent to $94.73.
- Iran-backed Houthi attacks on Saudi energy facilities widened supply fears, threatening Red Sea shipments as Hormuz flows fell below 2 million barrels a day.
- Goldman Sachs, Bank of America and HSBC raised forecasts, with the IEA expecting global oil supply to drop about 4.3 million bpd this year
Brent crude oil futures climbed above 100 dollars a barrel on Wednesday, breaching the symbolic level for the first time since July 24, as an intensifying Middle East conflict deepened fears over the region’s oil flows.
Brent rose 2.15 dollars, or 2.2 percent, to 100.07 dollars a barrel by 0721 GMT, while US West Texas Intermediate gained 1.70 dollars, or 1.83 percent, to 94.73. Moreover, Brent has risen by a quarter since early last month as hopes fade for a lasting end to the six-month-old US-Iran conflict.
Houthi attacks widen the risk
This week’s escalation drove the latest leg higher. Specifically, Iran-backed Houthi attacks on Saudi energy facilities set oil installations ablaze, raising the threat of a much wider conflict. Consequently, those strikes could endanger crude shipments via the Red Sea, a key alternative to the Strait of Hormuz.
Hormuz itself has been badly disrupted. According to Rystad Energy chief economist Claudio Galimberti, about 8 million to 9 million barrels a day flowed through the strait in the week before fighting resumed on August 30, double the prior week. However, volumes have since fallen below 2 million barrels a day, underscoring how fragile the route remains.
Forecasts climb as supply tightens
Consequently, banks are turning more bullish. Furthermore, a growing number, including Goldman Sachs, Bank of America and HSBC, have raised their crude price forecasts in recent days as supply risks mount.
The supply backdrop adds pressure. Although non-OPEC producers such as the United States, Canada and Guyana have ramped up output, the International Energy Agency said last month it expects global oil supply to fall about 4.3 million barrels a day this year, or roughly 4 percent.
Ultimately, the market now hangs on whether the conflict widens further. Since the Houthi strikes threaten both major Gulf export routes at once, traders are pricing in a real risk that disruptions deepen before any diplomatic breakthrough eases the pressure on global supply.
