U.S.-Iran Hostilities Send Oil Above $100

Brent crude rose above $100 a barrel for the first time since July 24, while West Texas Intermediate reached roughly $94, as direct U.S.-Iran hostilities and attacks on Saudi energy infrastructure intensified fears of supply disruptions. The U.S. said it destroyed five Iranian crude tankers near Kharg Island and in the Gulf of Oman after Iranian forces targeted U.S. naval vessels; Iran claimed retaliatory attacks on U.S.-linked ships and military positions, though some claims could not be independently verified. Houthi attacks in southern Saudi Arabia injured 73 people and temporarily suspended operations at several energy sites, while traffic through the Strait of Hormuz—previously carrying about 8 million to 9 million barrels per day—fell below 2 million barrels per day; Red Sea shipping was also restricted. Iran and Oman were reportedly nearing a temporary shipping arrangement for Hormuz, but uncertainty over its terms and U.S. acceptance limited its calming effect, while analysts warned the conflict could broaden and disrupt alternative routes and global supply chains. Tight inventories, strategic-reserve drawdowns, stronger Chinese buying, higher freight costs and the absence of a new OPEC+ increase supported the rally despite increased non-OPEC production, with forecasts of prices reaching $120 if Gulf output remains about 4 million barrels per day below prewar levels; rising energy costs were also stoking inflation concerns and lifting U.S. gasoline above $4 a gallon.