Brent crude extended its rally towards $102 a barrel as Iran vowed to intensify the conflict with the US, raising fresh concerns over oil flows through the Strait of Hormuz and the possibility of a prolonged disruption to Middle East energy supplies.
The global benchmark settled at $101.21 a barrel on Wednesday, its highest close since May, after rising 3.4%. It had touched $101.58 during the session. West Texas Intermediate settled at $96.05. Brent has now climbed for five straight sessions and is up more than 60% this year.
The latest rally followed the biggest wave of attacks on shipping since the war began. The US military said it destroyed five Iranian oil tankers after attacks on a US Navy warship, while Iran said it had struck vessels around the Strait of Hormuz in retaliation. Tehran has also warned of a broader response if US attacks continue.
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The escalation is particularly significant for oil markets because about a fifth of global oil and LNG flows through Hormuz under normal conditions. Shipments have continued, including on tankers operating with their transponders switched off, but volumes have been sharply curtailed as the security risk has risen. Reuters reported that flows through the strait had recently fallen below 2 million barrels a day, compared with 8–9 million bpd before fighting resumed.
The supply risk is also spreading beyond Hormuz. Iran-backed Houthi attacks on Saudi energy infrastructure have raised concerns over the Red Sea, an important alternative route for crude shipments. The broader disruption has already pushed refined products, particularly diesel, higher alongside crude.
The market is also watching Chinese demand. Increased Chinese buying has tightened physical markets, although smaller refiners are coming under pressure from higher crude prices and could reduce processing rates, potentially limiting further demand growth.
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