Brent holds above $100 as tanker attacks deepen supply fear

Oil prices remained elevated on Thursday, with Brent crude surpassing $100 a barrel, as traders anticipated further supply disruptions due to Iran and the United States intensifying their attacks on shipping. Brent crude futures experienced a slight decline of 0.1%, settling at $101.10 a barrel, while U.S. West Texas Intermediate crude rose 0.2% to $96.24 a barrel.

Since early August, Brent prices have increased by nearly 30% as the permanent cease-fire agreement between the U.S. and Iran to halt attacks has not been reached, leading to renewed fighting. Iran claimed to have targeted 10 ships near the Strait of Hormuz following the U.S. sinking of five Iranian oil tankers. Iran's Islamic Revolutionary Guard Corps vowed to intensify its response to any additional attacks, potentially keeping oil flows from the Persian Gulf below pre-war levels for the foreseeable future.

The Strait of Hormuz, which previously accommodated roughly a fifth of global oil and gas supplies, currently experiences significantly lower oil flows. In response, alternative channels for Gulf oil exports are being pressured, with Iran-aligned Houthi militants escalating their assaults on Saudi Arabia, threatening crude shipments via the Red Sea.

The tightness of physical markets, coupled with ongoing shipping disruptions, is bolstering a geopolitical risk premium in oil prices. The Brent oil benchmark, covering roughly two-thirds of supply, has remained above $100 per barrel since September 3, according to LSEG data. On Wednesday, the U.S. Energy Information Administration revised its oil price forecasts for the current year and the next higher, as global inventories shrink due to the depletion of Middle Eastern supplies.