Oil prices rise above $100 on Middle East supply fears

Oil prices rise above $100 on Middle East supply fears

Oil prices climbed on Friday, with Brent and US crude on course to finish the week above $100 a barrel for the first time since mid-May as escalating attacks along key Middle Eastern shipping routes raised concerns over prolonged supply disruptions.

Brent crude futures gained 81 cents, or 0.8%, to $108.44 a barrel, while US West Texas Intermediate (WTI) rose 69 cents, or 0.7%, to $103.17. Both benchmarks jumped more than 6% on Thursday.

Oil prices have gained nearly 13% this week, putting them on track for their strongest weekly increase since the week ending July 17.

Tensions have intensified around major oil and shipping routes. Iran-aligned Houthi forces seized control of Yemen’s port of Mocha on Thursday, increasing concerns over traffic through the Red Sea. Meanwhile, shipping activity through the Strait of Hormuz remains restricted as attacks on tankers have increased.

Recent attacks on Saudi energy facilities have also widened concerns beyond Iran and the Strait of Hormuz, raising fears that disruptions could spread across the region.

ING analysts said significant volumes were still moving through the Strait of Hormuz, but flows remained well below pre-war levels, highlighting the vulnerability of global energy supplies.

The disruption to oil supplies from the US-Iran conflict, combined with Ukrainian attacks on Russian refineries, pushed the average US diesel price above $6 per gallon for the first time, according to GasBuddy.

US President Donald Trump has shown no signs of reducing military action against Iran. He warned that the United States could target Iran’s Pickaxe Mountain near the damaged Natanz uranium enrichment facility, while saying he expected the conflict to end immediately after the November midterm elections.

Iran said it attacked 10 ships near the Strait of Hormuz on Wednesday after the United States struck five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps also warned that it would intensify its response to further attacks.

Analysts said WTI could retest its early-March high of $119.48 if the conflict continues to expand.

Market watchers are also closely monitoring China, the world’s largest crude oil importer. Continued Chinese purchases could amplify the impact of supply disruptions and push prices even higher.

Meanwhile, OPEC has lowered its forecast for global oil demand growth in 2026 to 380,000 barrels per day, marking its fifth consecutive downward revision. OPEC’s oil output also fell by 640,000 barrels per day in August, according to a Reuters survey.

Analysts said the next major move in oil prices will depend largely on whether physical supplies through key routes recover or face further disruption.