Brent crude prices climbed above $100 a barrel on Wednesday as Middle East tensions increased fears over regional oil supplies. The benchmark reached $100.07, gaining 2.2%, by 0721 GMT.
Meanwhile, US West Texas Intermediate crude rose $1.70, or 1.83%, to $94.73 a barrel. Brent has gained 25% since early last month as hopes fade for a lasting US-Iran conflict resolution.
Middle East attacks raise supply concerns
Furthermore, Houthi attacks on Saudi energy facilities this week intensified concerns after fires damaged oil installations. The attacks could disrupt crude shipments through the Red Sea, an alternative route to the Strait of Hormuz.
Oil flows through Hormuz remain severely restricted since the Iran war began on February 28. Before fighting resumed on August 30, around 8 million to 9 million barrels per day moved through the waterway, according to Rystad Energy Chief Economist Claudio Galimberti.
Banks raise oil price forecasts
However, Hormuz flows have recently dropped below 2 million barrels per day, adding pressure to supply expectations. Consequently, banks, including Goldman Sachs, Bank of America and HSBC, have raised their crude price forecasts.
Although producers outside OPEC, including the United States, Canada and Guyana, have increased output, supply risks remain. The International Energy Agency said last month that oil supply could fall by 4.3 million barrels per day this year, representing about 4%.
Analysts watch developments in the region because further attacks could tighten supplies and push prices higher. Meanwhile, traders assess alternative routes and production increases as uncertainty weighs on energy markets worldwide.
