Oil prices approach $100 per barrel due to new strikes in the Middle East

Oil prices have come close to $100 per barrel amid new strikes in the Middle East

Global oil prices continue to rise sharply, with this upward trend lasting for the fourth consecutive trading session. On Wednesday, the price of a barrel of Brent crude rose above $99, approaching the psychologically important mark of $100, Reuters reports. The reason was a new escalation of the conflict in the Middle East, which increases the risks of serious supply disruptions.

By Wednesday morning, Brent futures rose by 1.4% to $99.33 per barrel. The US benchmark West Texas Intermediate (WTI) also gained 1.4%, reaching $94.34 per barrel. Overall, since the beginning of August, the benchmark Brent grade has already risen in price by a quarter.

Markets are reacting to the sharp escalation of hostilities. Yemeni Houthis launched strikes on several cities in Saudi Arabia, threatening the kingdom's key energy facilities.

In addition, US forces attacked several Iranian oil tankers, and Iran responded by striking a US base in Jordan.

Although Riyadh has already rerouted some of its exports to bypass the Strait of Hormuz, new strikes on the kingdom's infrastructure could cause disruptions in global oil supplies, experts warn.

Analysts at the banking group ING point out that hopes for a peaceful resolution of the conflict have been exhausted, so the market will continue to price in a significant geopolitical premium (a markup for the risk of conflict escalation). In turn, according to experts at the Singaporean banking corporation OCBC, the strikes on Saudi facilities and the destruction of tankers threaten to disrupt logistics through the Strait of Hormuz for a long time and destabilize global supplies.