Oil prices extended their gains on Wednesday, with Brent crude climbing above $100 per barrel for the first time since July.
The move came as escalating tensions between the United States and Iran increased fears of further disruption to energy supplies across the Middle East.
Brent Crude Breaks Above $100
By 06:04 ET, Brent crude futures rose 2.6% to $100.45 per barrel.
U.S. West Texas Intermediate crude also advanced, gaining around 2.3% to $95.19 per barrel.
The latest rally reflects growing concern that continued military action in the region could affect oil production, tanker traffic and key shipping routes.
U.S.-Iran Fighting Intensifies
Oil prices moved higher after the U.S. military said it had destroyed five Iranian oil tankers following Iranian missile attacks on American naval assets.
Iran later launched missiles toward U.S. targets in Jordan.
Tehran also warned Gulf countries, including Kuwait and Bahrain, against assisting U.S. military operations.
Iran Reports Further Strikes
Iran’s Islamic Revolutionary Guard Corps said it carried out a major missile attack against a U.S. military base near Al Azraq in eastern Jordan.
The IRGC also claimed it had targeted 10 vessels, including two U.S. ships and eight oil tankers.
The attacks marked another escalation in fighting across the Gulf region and added to concerns over the security of energy infrastructure and shipping.
Houthi Attacks Add to Regional Risk
The latest escalation followed strikes by Iran-backed Houthi forces on Saudi Arabia.
Those attacks reportedly targeted energy and economic facilities in several southern Saudi cities and left more than 70 people injured.
The widening conflict has increased fears that more oil infrastructure or export routes could be affected.
U.S. Warns of Further Retaliation
U.S. Secretary of State Marco Rubio warned Iran that Washington would continue targeting Iranian oil tankers in response to attempted attacks on American warships.
The increasingly confrontational rhetoric has reduced expectations for a quick diplomatic breakthrough.
Analysts at ING said recent events suggest that negotiations are still unlikely to restart soon.
As a result, the oil market is likely to continue pricing in a significant geopolitical risk premium.
Strait of Hormuz Flows Show Some Improvement
Despite the worsening conflict, oil traffic through the Strait of Hormuz has shown signs of recovery.
Estimates suggest that flows through the key waterway have increased to around 10 million barrels per day.
That remains only about half of the levels seen before the conflict.
The Strait of Hormuz is one of the world’s most important oil shipping routes, making any disruption there highly significant for global energy markets.
Goldman Sachs Sees Risk of $120 Oil
Goldman Sachs has warned that oil prices could climb significantly further if attacks on vessels intensify and shipping disruptions worsen.
The bank said crude prices could potentially reach $120 per barrel under a more severe escalation scenario.
Such a move would increase inflation concerns and potentially place additional pressure on consumers, businesses and global central banks.
Oil Outlook Remains Driven by Middle East Risks
For now, the oil market remains highly sensitive to developments in the Middle East.
Any further attacks on tankers, energy infrastructure or shipping routes could push prices higher.
However, improving flows through the Strait of Hormuz could offer some relief if the situation stabilizes.
The balance between geopolitical escalation and continued energy exports will likely remain the key driver of crude oil prices in the near term.
