• Brent crude oil prices surpassed $100 a barrel amid rising tensions in the Middle East.
• Key oil supply routes through the Strait of Hormuz and Red Sea are threatened by conflict.
• Many financial institutions have increased their price forecasts for crude oil.

Benchmark Brent crude oil futures surged above $100 a barrel for the first time since July 24, as escalating conflict in the Middle East heightened concerns over oil supply disruptions. Brent crude traded at approximately $100.07 a barrel, reflecting a 25% rise since early August, while WTI reached $94.73 a barrel during the same period, according to Indiatimes, Reuters, Bangkok Post, and Channel News Asia.

The rise in prices is primarily attributed to renewed attacks on Saudi oil facilities by Iran-backed Houthis, which threaten crude shipments via alternative routes, such as the Red Sea. These developments have exacerbated fears regarding ongoing disruptions through the crucial Strait of Hormuz, where oil flows have significantly diminished since the conflict began in February 2023, according to Indiatimes, Reuters, and Channel News Asia.

Various banks, including Goldman Sachs and Bank of America, have recently adjusted their crude price forecasts upward due to the increasing uncertainty surrounding oil exports. Rystad Energy reports that approximately 8 to 9 million barrels per day passed through the Strait of Hormuz prior to the recent uptick in fighting, but these figures have since dropped below 2 million bpd, highlighting the drastic changes in oil flow, noted in Reuters, Bangkok Post, and Channel News Asia.

As global oil supply is anticipated to decline further, with estimates from the International Energy Agency suggesting a reduction by approximately 4.3 million bpd this year, the market continues to react strongly to geopolitical tensions. Non-OPEC producers, including the US and Canada, are increasing output but remain unable to completely offset supply losses, according to Indiatimes, Reuters, and Bangkok Post.