Brent crude oil prices are approaching $100 a barrel, trading at $96.90 per barrel, an 8.5% increase from August 30th, driven by renewed US-Iran attacks on shipping in the Strait of Hormuz. This escalation has shifted market expectations from a gradual reopening of the Strait to fears of prolonged supply disruption, with the geopolitical premium currently estimated at approximately $10 per barrel.
Shipping data from Kpler indicates that only about 10 commodity vessels per day crossed the Strait of Hormuz over the past 10 days, the lowest level since May. This is a significant constraint, as the Strait normally handles roughly one-fifth of global oil supply, or 20.9 million barrels per day in the first half of 2025. Just two vessels transited on Saturday and six on Sunday, intensifying concerns about tighter crude flows.
Analysts from Informist Media and Commerzbank predict Brent crude could break the $100 mark and even reach $105 to $110 per barrel if the US-Iran conflict continues to escalate. Arthavrksh Financial Services founder Ravindra Rao notes that a sustained close above $97.50 could lead to a test of $102-$104 per barrel. This is further supported by ANZ Research analysts who believe Middle East oil flows will not return to normal quickly.
While US Energy Secretary Chris Wright claims that oil transits through the Strait are still averaging over 9 million barrels a day and that the US Navy is containing the situation, the US Energy Information Administration (EIA) estimates that Hormuz oil flows averaged 4.9 million barrels per day in the second quarter of 2026, a substantial drop from 21.6 million barrels per day in Q4 2025. The EIA also reported crude production shut-ins averaged 5.5 million barrels per day in July, further contributing to supply concerns.
Iran has announced plans for a new restricted zone and shipping corridor in the Gulf, further exacerbating tensions. This disruption is also impacting product prices, particularly diesel, which could see record highs due to a loss of 5-6 million barrels of refining capacity globally, according to Kotak Securities' Anindya Banerjee.
