Brent crude oil futures climbed above $100 a barrel on Wednesday for the first time since July 24, as escalating conflict in the Middle East heightened concerns over disruptions to oil supplies from the region.
Brent futures rose $2.15, or 2.2 per cent, to $100.07 a barrel by 0721 GMT, while US West Texas Intermediate (WTI) crude gained $1.70, or 1.83 per cent, to $94.73 a barrel.
Brent has risen by about 25 per cent since early last month as hopes for a lasting resolution to the six-month-old US-Iran conflict continue to fade.
The conflict has entered its seventh month with no clear signs of de-escalation, despite claims from the White House that a deal could be imminent. The prolonged crisis has heightened concerns among investors that rising energy prices could fuel inflation and force the US Federal Reserve to raise interest rates.
Tehran and Washington remain locked in a stalemate, with Iran maintaining control over the Strait of Hormuz, a critical route for global oil and gas shipments, while the United States continues efforts to restrict Iran’s ports and weaken its economy.
Iran said on Wednesday that it had attacked a US military base in Jordan following American strikes on Iranian vessels in the Strait of Hormuz. Tehran said those strikes were themselves retaliation for ballistic missile launches against a US warship.
Iran also threatened to target oil tankers off Kuwait and Bahrain and urged crews to leave their vessels, according to the state-run IRNA news agency.
The latest escalation followed exchanges of strikes between Saudi Arabia and Iran-backed Houthi forces in Yemen. The Houthis have targeted oil facilities as part of an offensive towards the Bab al-Mandab chokepoint in the Red Sea.
The waterway has become increasingly important for Saudi oil exports following the closure of the Strait of Hormuz.
Both major crude benchmarks rose more than 1 per cent in early trading, with Brent reaching $99.68 a barrel before crossing the $100 mark. WTI approached $95, its highest level since June.
The surge in energy prices has also raised concerns about persistent global inflation, putting pressure on central banks to maintain or increase borrowing costs. The European Central Bank is widely expected to raise rates on Thursday.
Investors are now focused on the release of US consumer price index data on Friday, which could influence the Federal Reserve’s decision on interest rates next week.
“The continuing conflict in the Middle East is keeping concerns over supply disruptions, and that in turn is worrying investors about the inflationary consequences of elevated oil prices,” said Fawad Razaqzada, a market analyst at FOREX.com.
“For the Fed, the combination of resilient US employment and renewed pressure from energy prices are both hawkish signals,” he added.
Razaqzada warned that a sustained increase in oil prices could reverse recent progress on inflation while putting additional pressure on consumers and businesses.
The prospect of higher interest rates weighed on global equities, with all three major US stock indexes falling on Tuesday.
Asian markets were mixed on Wednesday, although technology stocks continued their recovery from July’s sell-off as investor interest in artificial intelligence returned.
Seoul led regional gains, with chipmaker SK hynix rising more than 3 per cent. Shanghai, Wellington, Taipei, Bangkok and Manila also advanced, while Hong Kong, Tokyo, Sydney, Singapore, Mumbai and Jakarta declined.
European stocks opened lower, with London, Frankfurt and Paris all recording early losses.
In currency trading, the yen strengthened to around 152.95 per dollar after Tuesday’s rally, which had brought it close to its 2026 high before the gains eased later in the session.
Key Figures at Around 0715 GMT
- WTI crude: Up 1.4% at $94.37 a barrel
- Brent crude: Up 1.6% at $99.49 a barrel
- Nikkei 225: Down 0.2% at 65,142.78
- Hang Seng: Down 0.3% at 25,232.38
- Shanghai Composite: Up 0.3% at 3,951.51
- FTSE 100: Down 0.3% at 10,775.68
- Dollar/yen: 153.30 yen, from 153.96 yen on Tuesday
- Euro/dollar: $1.1639, from $1.1627
- Pound/dollar: $1.3559, from $1.3541
- Euro/pound: 85.84 pence, from 85.85 pence
- Dow Jones: Down 1.2% at 52,786.07
