Brent crude futures rose $3.29, or 3.4%, to settle at $101.21 a barrel on Wednesday, touching an intraday high of $101.58, as escalating US-Iran hostilities compressed shipping through the Strait of Hormuz to near-zero levels.
U.S. West Texas Intermediate climbed $3.02, or 3.25%, to $96.05 a barrel. The two benchmarks last closed this high on May 22, having spent months well below the $100 mark until a brief spike in late July.
The price surge followed a day of intensified military action. Iran said it attacked 10 ships, while the U.S. sank five Iranian油 tankers. A drone strike hit an Iraqi fuel oil tanker in Iraqi territorial waters, carrying roughly 2 million barrels of product. The conflict, which began on February 28, sent Brent to a peak of $126.41 on April 30 before the market pulled back.
Supply transit through the Strait of Hormuz — historically responsible for about one-fifth of global oil and gas supply — has contracted sharply. In the week before fighting resumed on August 30, 8 million to 9 million barrels per day flowed through the strait, double the prior week's volume. Flows have since fallen below 2 million barrels per day. Only six commodity vessels passed through on Tuesday, down from nine the previous day and well below the 10-day average of approximately 12.
Dated Brent has traded above $100 since September 3, according to LSEG data, and the benchmark underpins pricing for roughly two-thirds of global crude supply.
"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.
Near-term fundamentals have shifted dramatically. "The near-term fundamentals have suddenly turned to much tighter supplies, and the back and forth strikes from the U.S. and Iran look to now be a mainstay, with any chance of a peace agreement moving further out in the distance," said Dennis Kissler, senior vice president of energy trading at BOK Financial.
Analysts warned that disruptions may spread beyond Iranian shipping. Hamad Hussain, senior climate and commodities economist at Capital Economics, identified the risk that recent tanker attacks could reduce ship-to-ship transfers in the Gulf of Oman, which have so far provided a critical offset to restricted Strait passage. Daniela Hathorn, senior market analyst at Capital.com, noted that Houthi attacks on Saudi energy facilities have widened the threat, raising concerns that disruption could extend to the infrastructure and alternative routes that have helped keep Gulf crude flowing.
At the pump, U.S. gasoline averaged about $4.22 a gallon, while diesel approached a record near $6 a gallon.
