Brent crude rallied towards $100 per barrel on Wednesday, marking its highest level since late July, as geopolitical tensions in the Middle East intensified. This surge in oil prices was fueled by renewed attacks across the region, including Houthi strikes on Saudi energy facilities and reports of explosions at Iran's crucial Kharg Island export hub. The U.S. also conducted strikes on Iranian tankers near Kharg Island and in the Gulf of Oman, further escalating concerns about supply disruptions. West Texas Intermediate (WTI) crude also saw a significant increase, trading at $94.34 a barrel, up 1.4%.
The ongoing conflict in the Middle East, now in its seventh month, has significantly impacted oil markets. Brent crude prices have jumped by a quarter since early August, with hopes for a permanent resolution to the war fading. Goldman Sachs analysts, including Daan Struyven, have modestly raised their oil-price estimates, citing persistent shipping disruptions that are expected to continue into 2027. Struyven noted that the probability of Brent exceeding $120 a barrel is increasing, especially with the intensification and broadening of shipping attacks.
The global benchmark, Brent crude, rose 1.4% to $99.33 a barrel by 0212 GMT. Futures for Brent crude added 1.55% to $99.44 a barrel, while U.S. benchmark West Texas Intermediate futures for October delivery jumped 1.75% to $94.66 a barrel. This upward trend reflects growing fears of fresh supply tightness and a prolonged Middle East conflict, leading to declining global inventories and soaring prices for refined fuels like diesel. Oil flows through the Strait of Hormuz are estimated to be about 10 million barrels a day, roughly half of pre-war levels.
