Benchmark Brent crude futures rose $2.15, or 2.2%, to $100.07 a barrel by 0721 GMT on Wednesday, while US West Texas Intermediate gained $1.70, or 1.83%, to $94.73 a barrel.
The gains extend a sharp rally in oil prices, with Brent now about 25% higher than at the beginning of last month, as prospects for a lasting settlement to the six-month US-Iran conflict weaken.
Tensions intensified this week after Iran-backed Houthi forces attacked Saudi energy infrastructure, raising fears that the conflict could spread further across the region and disrupt oil supplies.
The attacks have also renewed concerns over crude shipments through the Red Sea, an important alternative route to the Strait of Hormuz, where oil traffic has fallen significantly since the Iran war began on February 28.
Several major financial institutions, including Goldman Sachs, Bank of America and HSBC, have responded to the heightened risks by raising their forecasts for crude prices.
Claudio Galimberti, Chief Economist at Rystad Energy, said between eight million and nine million barrels of oil per day were transported through the Strait of Hormuz in the week before fighting resumed on August 30, roughly twice the previous week’s level.
However, flows through the strategic waterway have since fallen below two million barrels per day, highlighting the potential impact of the conflict on global energy markets.
Although oil producers outside OPEC, including the United States, Canada and Guyana, have increased production, the International Energy Agency said last month that global oil supply could decline by 4.3 million barrels per day this year, equivalent to about 4% of global supply.
Goodness Anunobi
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