Brent Crude Surpasses $100 as Middle East Tensions Raise Supply Concerns

Brent crude oil futures climbed to $100.69 a barrel on Wednesday, marking a six-week high, as renewed fighting in the Middle East heightened concerns about the region’s oil supply. The benchmark was up 2.83% by 1033 GMT after briefly touching $100.95. U.S. West Texas Intermediate also rose, reaching $95.21 a barrel, its strongest price since early June.

"The move towards and back above $100 Brent is reflecting a market that increasingly has to change its view on how long the Middle East crisis will continue to curb supply from the region," said Ole Hansen, head of commodity strategy at Saxo Bank.

Recent attacks by Iran-backed Houthi forces on Saudi energy facilities and threats to Red Sea shipping routes have amplified fears of a broader disruption. Analysts note that the risk of reduced ship-to-ship transfers in the Gulf of Oman could further tighten global supplies.

"Market participants appear to be pricing in a more prolonged conflict in the Middle East as well as the risk that the latest escalation in military strikes disrupts oil flows from the region," said Hamad Hussain, senior climate and commodities economist at Capital Economics.

Physical Brent prices have stayed above $100 per barrel since early September, according to LSEG data, while European diesel futures hovered near $199 per barrel. Refining margins for diesel have hit record levels, reflecting tight market conditions.

"The outlook for middle distillate products, such as diesel, jet fuel, and fuel oil, continues to point to very tight market conditions, raising the risk of further price spikes," Hansen added.

The price surge occurs as central banks worldwide grapple with elevated inflation, adding complexity to the energy market outlook.