Oil Prices Climb Above $100 a Barrel as Middle East Attacks Raise Supply Fears
Reporting based primarily on timesofindia.indiatimes.com.
Oil Benchmarks Top $100
Brent crude and WTI oil prices both climbed above $100 a barrel for the first time since mid-May as attacks in the Middle East raised fears of prolonged supply disruptions. [1] Around 7:30 am IST on Friday, Brent crude reached $107.70 per barrel and WTI stood at $102.50 per barrel, with both benchmarks up nearly 13 percent for the week. [1] Both benchmarks had surged more than 6 percent on Thursday, taking their weekly gains to nearly 13 percent, the steepest increase since the week ended July 17. [1] Oil prices extended their gains on Friday, with both major benchmarks on track to finish the week above $100 a barrel for the first time since mid-May. [1]
Middle East Attacks Disrupt Shipping
Attacks by Iran-aligned Houthis in Yemen, intensified tanker strikes near the Strait of Hormuz, and Iranian claims of attacking 10 ships have heightened risks to oil shipments in the Red Sea and Gulf. [1] Iran-aligned Houthis seized control of Yemen's port of Mocha on Thursday, posing a further threat to Red Sea traffic, while traffic through the Strait of Hormuz remains restricted amid intensified tanker attacks in recent days. [1] The attacks from Yemen on Saudi energy facilities have added another layer of risk to the oil market, with concerns now extending beyond Iran and the Strait of Hormuz. [1] US President Donald Trump warned that the US may hit Iran's Pickaxe Mountain, located near its heavily damaged Natanz uranium enrichment facility, and said the war would likely last beyond the November midterm elections. [1] Iran said it had attacked 10 ships near the strait on Wednesday, after the US hit five Iranian oil tankers. [1] Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks. [1]
U.S. Diesel Hits Record $6 a Gallon
The U.S. national average diesel price surpassed $6 per gallon for the first time, driven by the U.S.-Iran conflict and Ukrainian attacks on Russian refineries. [1] The U.S. national average price of diesel surpassed $6 a gallon for the first time ever on Thursday, according to price tracker GasBuddy, as the U.S.-Iran war and Ukrainian attacks on Russia's refineries have squeezed supply. [2] The impact of the attacks has also been reflected in US fuel prices. [1]
OPEC Lowers Demand Outlook
OPEC cut its 2026 world oil demand growth forecast to 380,000 barrels per day for the fifth consecutive revision, while its own output fell 640,000 barrels per day in August. [1] OPEC has lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, according to a copy of its monthly report, marking the fifth straight downward revision to its demand growth forecast. [1] OPEC oil output also fell by 640,000 barrels per day in August, a Reuters survey found, as Saudi exports faced new disruptions due to the war in Iran and a US blockade cut Iran's shipments. [1] US crude inventories dropped by 391,000 barrels last week, and analysts say the oil rally's durability will depend on whether China continues stepping up its crude purchases. [1] US crude oil inventories fell by 391,000 barrels to 424.1 million barrels last week as refining activity continued to show strength, the Energy Information Administration said. [1]
China's Buying to Decide Rally Duration
Analysts said the durability of the oil rally will depend heavily on China, the world's largest crude importer. [1] China has stepped up purchases in recent weeks after months of subdued demand, boosting physical crude markets, ING analysts said in a note. [1] Continued buying could amplify the impact of supply disruptions and push prices higher, while a pullback in imports could temper market gains. [1]
What to watch next: Analysts said the durability of the oil rally will depend heavily on whether China continues stepping up its crude purchases amid the supply risks from ongoing Middle East attacks.
