Brent crude oil prices climbed above the $100-a-barrel mark on Wednesday for the first time since July, as escalating military tensions in the Middle East heightened fears of major disruptions to global energy supplies.
Brent futures rose by $2.15, or 2.2 per cent, to $100.07 per barrel by 0721 GMT, while US West Texas Intermediate crude gained $1.70, or 1.83 per cent, to $94.73.
The latest rally means Brent has gained about 25 per cent since the beginning of August, reflecting growing concerns that the prolonged conflict between the United States and Iran could further threaten oil shipments from the region.
The crisis has become increasingly focused on the Strait of Hormuz, one of the world’s most important oil and gas shipping routes. Iran has maintained pressure on the strategic waterway, while the United States has intensified efforts to restrict Tehran’s access to international trade.
Tensions escalated further on Wednesday after Iran said it had attacked a US military base in Jordan following American strikes on Iranian vessels in the Strait of Hormuz.
Iran also reportedly warned oil tanker crews operating near Kuwait and Bahrain to leave their vessels, raising fresh concerns about the safety of commercial shipping and the continuity of crude exports.
The latest developments came as Saudi Arabia and Iran-backed Houthi fighters in Yemen exchanged attacks, with the Houthis targeting oil infrastructure as fighting spread towards the Bab al-Mandab chokepoint linking the Red Sea to the Gulf of Aden.
Market analysts said the possibility of prolonged supply disruptions was driving the latest surge in crude prices.
“The continuing conflict in the Middle East is keeping concerns over supply disruptions, and that in turn is worrying investors about the inflationary consequences of elevated oil prices,” market analyst Fawad Razaqzada of FOREX.com said.
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He warned that sustained increases in energy prices could complicate efforts by central banks to bring inflation under control.
Higher oil prices are already adding to inflationary pressure globally, raising concerns that central banks could delay interest-rate cuts or even consider further increases.
Investors are now watching closely for the release of US consumer price data on Friday, which could influence the Federal Reserve’s decision on interest rates at its next meeting.
The prospect of higher borrowing costs also weighed on global equities, with major Wall Street indexes ending lower, while European markets opened in negative territory on Wednesday.
Asian markets recorded mixed performances, with some technology stocks recovering amid renewed optimism over artificial intelligence.
Analysts said further escalation in the Middle East could push crude prices significantly higher if major production facilities or shipping routes remain under threat.
For oil-importing economies, a sustained rise in crude prices could translate into higher fuel, transportation and production costs, potentially adding to broader inflationary pressures.