Dubai: Brent crude oil prices rose above $100 a barrel on Wednesday for the first time since July 24 as renewed fighting in the Middle East increased fears about oil supplies and the safety of key shipping routes.
Brent crude futures rose $2.15, or 2.2 percent, to $100.07 a barrel by 0721 GMT. US West Texas Intermediate crude also rose, gaining $1.70, or 1.83 percent, to $94.73 a barrel.
Brent prices have risen by about 25 percent since early August as renewed fighting and attacks across the region have increased concerns about oil supplies and shipping routes.
The latest rise came after a series of attacks involving Iran, the United States, the Houthi movement in Yemen and Saudi Arabia.
On Tuesday, Houthi forces launched missile and drone attacks against several locations in southern Saudi Arabia. Saudi authorities said 73 people were injured, including women and children.
The attacks affected Abha, Khamis Mushait, Jazan and Najran. Saudi authorities also reported fires at energy facilities and other sites.
The attacks have increased concern about Saudi energy infrastructure at a time when oil supplies from the Gulf are already under pressure. Some energy operations were temporarily suspended following the attacks.
The Jazan area is home to a major Saudi oil refinery with a capacity of about 400,000 barrels a day. However, available reports do not establish how much production capacity was lost because of the attacks.
The attacks have also increased concerns about shipping through the Red Sea and the Bab el Mandeb, a key route between the Red Sea and the Gulf of Aden. The Houthis have previously attacked commercial shipping in the region.
At the same time, oil shipments through the Strait of Hormuz have been severely reduced. Before renewed fighting on August 30, between 8 million and 9 million barrels of oil a day were passing through the strait. Recent flows have fallen below 2 million barrels a day, according to market estimates reported by Reuters.
The Strait of Hormuz is one of the world's most important energy routes. Prolonged disruption could affect oil supplies far beyond the Middle East, particularly in countries that depend heavily on imported energy.
The conflict also escalated between the United States and Iran on Tuesday.
The US military said it destroyed five Iranian oil tankers after Iran's Islamic Revolutionary Guard Corps targeted a US Navy warship with ballistic missiles. The US military said the crews were ordered to leave the vessels before they were struck.
Iran then retaliated.
Iran's Revolutionary Guard said it fired ballistic missiles at a US military base in Jordan and attacked 10 ships near the Strait of Hormuz. The Revolutionary Guard said the ships included two US vessels and eight oil tankers. Its claims about damage to the vessels have not been independently confirmed.
Jordan's armed forces said 18 of 20 ballistic missiles fired towards the country were intercepted. The other two fell in unpopulated areas, and no casualties were reported.
The latest exchanges have added to the risks facing an already unstable regional energy market. The combination of reduced oil flows through the Strait of Hormuz, attacks on Saudi energy facilities and threats to shipping routes has increased fears of a longer disruption.
The International Energy Agency has forecast that global oil supply will decline by 4.3 million barrels a day, or about 4 percent, in 2026. The agency has described the current disruption as the largest supply disruption in the history of the global oil market.
The 4.3 million barrel figure is a forecast for the year and does not mean that 4.3 million barrels of daily production have suddenly been lost.
Higher oil prices could also increase inflation pressures in countries that import large amounts of crude. Asian economies are particularly exposed because many depend heavily on imported energy from the Middle East.
For oil markets, the main concern is now not only how much crude is being produced but whether it can safely reach international buyers.
The move above $100 is therefore more than a market milestone. It reflects growing concern that the conflict could continue to disrupt one of the world's most important sources of oil and major routes used to transport energy.
The situation remains fluid, with further military action, changes in oil flows and developments around the Strait of Hormuz likely to influence oil prices in the coming days.