Oil prices set to end week over $100 for first time in nearly 4 months

Oil prices are poised to exceed $100 a barrel for the first time in nearly four months as escalating attacks in the Middle East heighten concerns over potential supply disruptions, according to wire reports. Brent crude futures surged $1.05, or 1%, to $108.68 a barrel, while US West Texas Intermediate crude climbed 95 cents, also 1%, to $103.45 a barrel. Both benchmarks witnessed a 6% increase on Thursday, marking a 13% weekly gain, the steepest since July 17.

Recent events have only exacerbated fears of a prolonged supply crunch. The Houthi militant group has taken control of Yemen's Mocha port, potentially threatening Red Sea traffic, while tanker attacks in the region have intensified. Notably, the recent attacks by Yemen on Saudi energy facilities mark an escalation beyond Iran's influence in the Strait of Hormuz, raising apprehensions of broader regional disruptions.

In a stark warning, US President Donald Trump suggested the US might target Iran's nuclear facilities near Natanz, hinting at a prolonged conflict. Analysts now speculate that West Texas Intermediate crude could retest the $119.48 high reached in early March as the situation escalates.

The US-Iran war and ongoing Ukrainian attacks on Russia's refineries have fueled a surge in diesel prices, with the US national average surging above $6 a gallon on Thursday. Analysts predict the rally's longevity will depend heavily on China, the world's largest crude importer. If China continues to purchase oil, it could amplify the impact of supply disruptions and further drive prices upward.

OPEC recently revised its forecast for global oil demand growth in 2026 to 380,000 barrels per day, a fifth consecutive downward adjustment. Meanwhile, OPEC oil output dropped by 640,000 barrels per day in August, according to a Reuters survey.