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US Oil Update: Brent Surges Past $100 as US-Iran Conflict Triggers Shortage Fears

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Global oil benchmarks surged for a fifth straight day on Thursday, with Brent hitting the $100 per barrel mark as the US-Iran conflict heavily disrupted key maritime trade routes, raising severe supply concerns.

Brent crude futures climbed 6.5% to $100.14 per barrel, while West Texas Intermediate crude futures surged over 5% to $91.52/bbl. Brent futures hit their highest since May 26 while WTI crude futures hit their highest since June 11.

"Oil prices rise on the storm of wars with some backdoor support from Tropical Storm Bertha as geopolitical supply fears and storm-related disruptions are fueling the rally, with traders watching for any further escalation," said Phil Flynn, senior market analyst at Price Futures Group.

The market rally followed reports that Yemen-backed Houthi militants struck two Saudi tankers, including the Saudi-flagged Encelia, in the Red Sea near the vital Bab al-Mandab strait.

US President Donald Trump warned on Thursday that the US will inflict major military punishment for any future proxy strikes, while Iranian Parliament Speaker Mohammad Bagher Ghalibaf reportedly stated that if Iran cannot export its oil, no regional country will be able to do so.

Although US Central Command said via X that the Strait of Hormuz remains open and rejected Iranian control claims, markets are aggressively pricing in tightening physical shortages.

Analysts at Saxo Bank noted that a growing geopolitical risk premium is driving a renewed focus on inflation.

Furthermore, Kpler analysts highlighted that physical spot markets are rapidly shifting from oversupply to potential shortages due to shrinking inventories, mounting delivery risks, and reduced vessel traffic.

These supply concerns overshadowed a weekly Energy Information Administration report showing US commercial crude inventories unexpectedly increased by 2 million barrels to 411.7 million barrels in the week ended July 17.

Analysts emphasized that despite the inventory build, low US strategic petroleum reserves and expanding drone campaigns targeting Black Sea and Caspian Pipeline Consortium routes leave global markets acutely vulnerable to prolonged supply bottlenecks.

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Oil & Energy

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