Oil prices advanced on Wednesday, taking Brent crude to within a dollar of $100 a barrel as traders monitored further military activity in the Middle East and possible disruption to regional exports.
Brent futures gained 1.3% to $99.22 a barrel by 0614 GMT. U.S. West Texas Intermediate was 1.2% higher at $94.13 a barrel.
The international benchmark has risen by about 25% since early August. The increase has coincided with renewed fighting in the six-month conflict and reduced expectations of a permanent resolution.
Saudi Arabia and shipping routes remain under scrutiny
The latest escalation included strikes on several Saudi Arabian cities by Iranian-backed Houthi forces in Yemen on Tuesday.
U.S. forces separately struck multiple Iranian oil tankers, while Iran targeted a U.S. military base in Jordan and attacked ships.
“Bullish momentum is building in crude markets as Brent crude approaches the psychologically important $100-per-barrel mark,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
The developments have added to existing uncertainty surrounding Middle Eastern oil flows following previous attacks on energy infrastructure and shipping routes.
Saudi Arabia has rerouted some crude exports away from the Strait of Hormuz. Analysts said continued attacks on the country could complicate measures designed to maintain shipments to international markets.
“Iran’s attacks on Saudi energy facilities and the subsequent destruction of five Iranian tankers raised concerns about another prolonged disruption to oil supplies,” OCBC analysts said in a note.
Inflation impact monitored as crude prices increase
Higher crude prices are also being assessed for their potential impact on inflation, particularly across Asian economies that import a significant proportion of their energy requirements.
“$100 Brent should not be viewed simply as a psychological milestone. It is a warning level for the broader economy,” Sachdeva said.
Brent’s approach toward $100 leaves energy infrastructure, shipping routes and the continuity of Middle Eastern crude exports among the factors being monitored by oil markets.
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