Brent Holds Above $100 as 30% Rally Raises Supply Fears

Oil prices eased on Thursday, but Brent crude remained above the psychologically important $100-a-barrel level as traders assessed the risk of deeper supply disruptions across the Middle East.

Brent futures fell 0.7% to $100.50 a barrel by 0619 GMT, while WTI crude declined 0.5% to $95.58. Brent has climbed nearly 30% from its early-August low after efforts to secure a lasting ceasefire between the United States and Iran failed and fighting resumed.

The latest escalation has shifted the market’s focus from temporary disruption to the possibility of prolonged constraints on physical crude flows. The U.S. military said it destroyed five Iranian oil tankers, while Iran said it attacked 10 ships near the Strait of Hormuz.

Hormuz Disruption Raises Supply Risk

The Strait of Hormuz is the central concern for oil traders. Before the war, roughly one-fifth of global oil and gas supplies passed through the waterway. Traffic has since fallen sharply, leaving producers, refiners and shipping companies with fewer reliable routes for moving energy.

Iran’s Islamic Revolutionary Guard Corps has warned of further retaliation if U.S. attacks continue. U.S. President Donald Trump also warned Tehran that Washington could strike Iran’s Pickaxe Mountain, keeping the risk of additional military action elevated.

The disruption extends beyond Hormuz. Iran-aligned Houthi forces have intensified attacks on Saudi Arabia, including energy infrastructure, raising concerns about crude exports through the Red Sea. That creates a second potential pressure point for Gulf supply chains.

Several indicators now show how quickly the physical market has tightened:

• Dated Brent has remained above $100 since September 3, according to LSEG data.
• Brent futures breached $100 for the first time since July on Wednesday.
• Hormuz oil flows remain well below pre-war levels.
• The U.S. Energy Information Administration has raised its oil-price forecasts amid declining global inventories.

The combination of restricted shipping and lower inventories leaves the market more exposed to another supply shock.

China Holds Key to Oil’s Next Move

The durability of the oil rally may now depend partly on China, the world’s largest crude importer. ING analysts said Chinese purchases have increased in recent weeks after several months of subdued demand, supporting physical crude markets.

Stronger Chinese buying would amplify the effect of Middle East supply losses because refiners would compete for a smaller pool of available barrels. A slowdown in imports, however, could limit further price gains by reducing demand pressure.

The market is therefore balancing two opposing forces: worsening supply risks in the Gulf and uncertainty over global consumption. If attacks continue to restrict tanker movements while Chinese demand remains firm, Brent could face renewed upward pressure.

Conclusion:

Brent’s move above $100 reflects a supply-risk premium rather than a simple increase in consumption. The next direction will depend on the duration of the disruption around Hormuz, the security of alternative export routes and China’s crude purchases. With physical Brent already above $100 and regional attacks expanding, another escalation could push prices higher quickly. A reduction in Chinese demand or a credible improvement in U.S.-Iran relations would provide the clearest path for Brent to retreat from triple-digit levels.