Brent crude oil nears $100 as US-Iran war chokes Hormuz, rattles oil markets

Brent crude oil prices breached a six-week high as tensions between the United States and Iran escalated, leading to concerns over potential supply disruptions through the Strait of Hormuz. Brent, the global benchmark, edged closer to $97 a barrel, while US West Texas Intermediate crude reached about $92.53. The UAE benchmark, Murban, hovered around $106.80.

Brent spiked to an intraday high of $98.06 before settling at $97.31. The surge is driven by fears that the escalating U.S.-Iran conflict could further impede oil flows through the Strait of Hormuz, a crucial energy chokepoint. Recent attacks involving commercial and military vessels have heightened supply fears. After the U.S. struck three Iranian oil tankers, Iran threatened further action against shipping and plans to establish a new restricted maritime zone around the Strait of Hormuz.

This escalation has led to a sharp decline in the number of ships crossing the strait, with only around 10 commodity ships per day, the lowest level since May. Historically, the strait handles roughly one-fifth of global oil supplies, making any prolonged disruption a significant threat to energy markets. Brent prices have surged around 20% in the past month, reflecting heightened geopolitical risk.

The latest rally has added to a sharp recovery in crude prices, following a retreat from much higher levels earlier in the conflict. The oil market is watching the situation in Hormuz closely, as the conflict's impact could range from temporary disruptions to prolonged challenges, depending on further developments.