Key facts
- Brent crude futures surpassed $100 a barrel for the first time since July 24.
- Iran launched missiles at a U.S. base in Jordan and ships.
- U.S. forces struck Iranian oil tankers and a base in Jordan.
- Saudi Aramco's Jizan refinery was hit again, threatening a major Red Sea refining hub.
- The U.S. EIA raised its oil price forecasts for this year and next year due to falling global stockpiles.
Benchmark Brent crude oil futures rose past $100 a barrel, breaching the symbolic barrier for the first time since July 24, as intensifying conflict in the Middle East fueled growing concern about oil flows from the region. Brent crude futures rose $2.15, or 2.2%, to $100.07 a barrel, while U.S. West Texas Intermediate crude was up $1.70, or 1.83%, at $94.73 a barrel.
Iran launched missiles at a U.S. base in Jordan and ships, while U.S. forces struck five Iranian oil tankers and a base in Jordan. The U.S. Energy Information Administration (EIA) raised its oil price forecasts for this year and next year, citing falling global stockpiles under pressure from the loss of Middle Eastern supply in the ongoing conflict. Global oil inventories have fallen by about 400 million barrels so far this year and are set to drop further.
Saudi Aramco's 400,000-barrel-per-day Jizan refinery was hit again, threatening a major Red Sea refining hub. The facilities in southwestern Saudi Arabia have become a repeated target. The refinery's location on Saudi Arabia's Red Sea coast has become increasingly important since the war with Iran disrupted exports through Hormuz.
Six months of reduced oil exports from the Middle East due to the Iran war have helped deplete oil stocks in some key consumers. The United States has also drawn heavily on its Strategic Petroleum Reserve, leaving it at its lowest level since 1982. Analysts warn that the current rise in energy prices is structural and not a one-off, part of a security premium that is only going to get bigger. A sustained period above $100 a barrel could be felt beyond energy markets, raising transport and manufacturing costs, reigniting inflation fears and potentially keeping interest rates higher for longer.