Oil Prices Rise for Fourth Session as Middle East Conflict Raises Supply Fears

Oil prices climbed for a fourth consecutive session on Wednesday, moving closer to the $100-a-barrel threshold as renewed fighting across the Middle East increased concerns about disruptions to crude supplies.

Brent crude futures rose 1.4% to $99.33 a barrel by 5:12 a.m. Saudi time, while US West Texas Intermediate crude gained 1.4% to $94.34 a barrel.

The latest increase came after the conflict intensified on Tuesday, with attacks involving Iran and its regional allies adding to uncertainty over energy infrastructure and shipping routes. The escalation has raised fears that further military action could disrupt crude production and exports from one of the world’s most important oil-producing regions.

Brent prices have risen by about 25% since the beginning of August. The increase has accelerated as hopes for a lasting settlement to the six-month-old conflict have weakened and fighting has resumed across several locations.

Iranian-backed Houthi forces in Yemen launched attacks on several Saudi cities on Tuesday, expanding the conflict’s impact on the kingdom, a major US ally and one of the world’s leading oil exporters.

US forces also struck several Iranian oil tankers, while Iran targeted a US military base in Jordan. The developments have added to concerns that the conflict could spread further and affect energy supplies.

“Recent developments only reinforce the view that we are still some way from a restart in peace talks,” ING analysts said in a note. They added that oil markets were likely to continue pricing in a significant risk premium while uncertainty remained high.

The latest violence comes after strikes on energy infrastructure and important shipping routes had already placed pressure on regional oil supplies.

Saudi Arabia has taken steps to redirect some crude exports away from the Strait of Hormuz, a vital route for global energy shipments. Analysts warned, however, that sustained attacks on Saudi territory could make it more difficult to maintain uninterrupted flows to international markets.

OCBC analysts said the combination of attacks on Saudi energy facilities and the destruction of five Iranian tankers had increased concerns about another extended disruption to oil supplies.

The Strait of Hormuz remains a major focus for energy traders because a substantial share of global oil shipments passes through the waterway. Any prolonged disruption could push prices higher and increase costs for consumers and businesses worldwide.

With Brent approaching the psychologically important $100 level, markets are closely watching further military developments, the security of regional oil facilities and shipping routes, and any signs of renewed diplomatic efforts to end the conflict.