Oil prices continued to climb during Asian trading on Wednesday, with Brent crude approaching the $100-per-barrel mark. This rise follows an escalation in the standoff between the U.S. and Iran, fueling concerns about major disruptions to oil supplies from the Persian Gulf and threats to shipping lanes.
As of 04:32, Brent crude futures for November delivery had risen 1.4% to $99.32 per barrel, while West Texas Intermediate (WTI) futures gained 1.5% to reach $94.44 per barrel.
This marked the seventh consecutive day of gains for WTI futures. Both benchmark grades are trading at multi-week highs.
The latest surge follows a statement from the U.S. military on Tuesday announcing that U.S. forces had destroyed five Iranian oil tankers in retaliation for Iranian missile strikes on U.S. naval assets.
Subsequently, Iran launched missile strikes against U.S. facilities in Jordan, and Tehran warned Persian Gulf states—including Kuwait and Bahrain—against supporting U.S. forces.
This escalation followed attacks on Saudi Arabia by the Iran-backed Houthi movement on Tuesday; strikes targeted energy and economic infrastructure in several southern cities, leaving more than 70 people injured.
Saudi authorities reported fires at energy facilities, including an oil refinery in Jazan, though the full extent of the damage has not yet been determined. US Secretary of State Marco Rubio warned Tehran on Tuesday that Washington would continue to strike Iranian oil tankers in response to attempted attacks on US warships.
The attacks have exacerbated already serious disruptions in the Strait of Hormuz, a key corridor for global oil supplies. Shipping traffic through the strait has reportedly dropped sharply after Iran threatened retaliation in the event of further US strikes.
Meanwhile, Iran has announced plans to establish a maritime exclusion zone around the Strait of Hormuz.
Flows through Hormuz have also declined, though some shipments continue as Persian Gulf producers seek to use alternative routes and ports.
The continuation of these supplies has so far prevented Brent crude from firmly establishing itself above the $100 mark, despite the sharp deterioration in the security situation.
Nevertheless, upside risks are mounting. Goldman Sachs has warned that oil prices could rise to $120 per barrel if attacks on vessels in the Middle East intensify and shipping disruptions worsen.
The oil rally is also reigniting concerns regarding inflation and interest rates.
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