Global oil prices have surged toward the $100-per-barrel mark amid escalating geopolitical tensions and ongoing disruptions to key shipping routes in the Middle East. The trend comes amid renewed attacks on Saudi Arabian energy infrastructure by Iran-backed Houthi militants and concerns over the continued instability affecting crude supply.
On Monday, Saudi Aramco’s installations at Jizan, home to a refinery with a capacity of 400,000 barrels per day, were targeted in an attack that caused fires and temporarily disrupted operations. Saudi authorities reported that subsequent strikes injured dozens of civilians in the southern part of the kingdom. These developments followed a series of hostile actions since February, when the United States and Israel launched joint strikes on Iran, contributing to a cycle of conflict and ceasefire attempts in the region.
Brent crude futures reached intraday highs above $98 per barrel on Monday, marking their highest level since June, and approached the psychologically important $100 threshold. By Tuesday, Brent briefly surpassed $99 before retreating slightly to about $97. The U.S. benchmark, West Texas Intermediate, similarly climbed to near $92. Market participants attribute these price movements to concerns over the disruption of oil flows through the Strait of Hormuz and the Red Sea—two vital corridors for global oil shipments. The Strait of Hormuz, in particular, has seen a significant reduction in traffic from the usual volume of approximately 20 percent of the world’s oil supply.
Analysts suggest that the ongoing conflict presents a complex dynamic with repeated flare-ups and attempts at negotiation. Zhao Xuyi, an analyst at Shanghai-based Guotai Junan Futures, noted that while neither the U.S. nor Iran currently appears willing or able to escalate the conflict further, underlying disputes over control of shipping routes continue to fuel volatility. This cyclical pattern of conflict and negotiation is expected to sustain unsettled market conditions.
Investment banks have responded by revising their price forecasts upward. Goldman Sachs raised its year-end Brent crude projection to $85 per barrel, acknowledging the likelihood that disruptions to Middle Eastern shipping will persist into 2027. The bank also outlined a more severe scenario under which Brent prices could exceed $120 per barrel if Gulf oil production remains substantially below prewar levels and attacks on shipping intensify. Other economic research firms, including Capital Economics, have similarly adjusted their outlooks, projecting that oil prices could stay near $100 per barrel for the remainder of the year due to prolonged supply risks.
While some observers initially expected political developments, such as upcoming U.S. midterm elections, might pressure a de-escalation or deal with Iran that could stabilize markets, those hopes have diminished amid continued hostilities. This prolonged uncertainty over oil supply routes and regional stability is driving price volatility and complicating efforts to forecast near-term energy market conditions.