Brent crude futures settled at $107.63 per barrel, marking a $6.42 increase and a 6.34% rise, while West Texas Intermediate (WTI) futures rose to $102.48, the first time U.S. oil has topped $100 since May. The broader oil market surged more than 6%, its steepest weekly gain in nearly two months, reaching levels last seen in May 19.
Supply disruptions have intensified, with U.S. crude inventories dropping by 391,000 barrels to 424.1 million last week—far below analysts’ expectations of a 1.55-million-barrel draw. Meanwhile, OPEC’s global oil demand forecast for 2026 was cut to 380,000 barrels per day, the fifth straight revision downward, while Iranian oil output fell by 640,000 barrels per day in August.
The latest escalation came Wednesday, when Iran’s Islamic Revolutionary Guard Corps reported attacks on 10 ships near the Strait of Hormuz, following a U.S. strike on five Iranian oil tankers. The Houthis, an Iran-aligned group based in Yemen, have also targeted Saudi energy infrastructure, expanding risks beyond the Strait of Hormuz. Analysts at S&P Global Energy noted that with conflict resolution prospects dimmed, markets are now operating in a prolonged period of persistent disruption risk, rather than episodic disruptions.
China, the world’s largest crude importer, has stepped up purchases in recent weeks after months of subdued demand, according to ING analysts. While further demand recovery could sustain prices, a pullback could temper gains. Meanwhile, U.S. President Donald Trump warned that the war in Iran could extend beyond November’s midterm elections, hinting at potential military actions targeting Iran’s uranium enrichment facilities.
The surge in Brent crude has already pushed European energy costs higher, raising inflation expectations and supply-chain pressures. Analysts at ICIS highlight that while past bearish trends relied on weak Chinese demand, recent demand recovery has bolstered physical crude markets, further supporting prices.
The broader market backdrop remains volatile, with Brent crude now trading above $100—a threshold last breached in July—while WTI remains just shy of the same level. The escalating geopolitical risks and supply constraints continue to shape oil markets, with traders closely monitoring developments in the Red Sea and broader Middle East tensions.
