Brent crude, the global oil benchmark, climbed 2.13 percent to $100 per barrel on Wednesday, reaching a six-week high.
US West Texas Intermediate (WTI) crude also rose 1.76 percent to $94.67 per barrel.
According to Reuters, oil prices surged as the US-Iran war threatened petroleum exports through the Red Sea, a key alternative route to the Strait of Hormuz. Oil flows through the strait have fallen sharply since the conflict began on February 28.
The US Central Command said US forces destroyed five Iranian crude oil tankers on September 8, following two days of attempted missile attacks on a US military cruiser.
Brent crude has climbed as high as $125 per barrel since the conflict began, reaching its peak on April 30.
Saudi Arabia reported on Tuesday that Iran-aligned Houthi attacks on several energy facilities in the kingdom’s southern region sparked fires and temporarily disrupted some operations.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies decided on September 6 to suspend planned oil production increases and maintain current output levels in October amid the ongoing war.
Backstory…
The rise in oil prices comes as the US-Iran war moves deeper into the world’s most important oil-shipping routes, with the latest escalation raising fears that crude supplies could be disrupted for an extended period.
The immediate concern is the Strait of Hormuz, through which millions of barrels of oil normally pass each day. Shipping through the waterway has fallen sharply amid the conflict.
Before the latest escalation, about 8–9 million barrels per day were moving through Hormuz; more recently, flows have dropped below 2 million barrels per day, according to Rystad Energy.
The situation deteriorated further after US forces destroyed five Iranian oil tankers following Iranian missile attacks on a US Navy warship. Iran subsequently attacked a US military base in Jordan and vessels around the Gulf, increasing the risk that commercial shipping could become a direct target in the conflict.
Read Also: Iran Strikes US Base in Jordan, Attacks Ships Near Hormuz After Tanker Strikes
