Oil Tops $100 as Hormuz Disruptions Drive 10% Weekly Surge

Key Points

• Brent trades near $106 and WTI above $101, leaving both benchmarks more than 10% higher this week.
• Traffic through the Strait of Hormuz remains far below pre-war levels as attacks threaten Gulf and Red Sea energy routes.
• OPEC cut its 2026 global oil-demand growth forecast to 380,000 barrels a day, limiting the longer-term bullish case.

Oil prices are heading toward their first weekly close above $100 a barrel since May, despite retreating Friday as diplomatic efforts raised hopes for safer shipping through the Strait of Hormuz. Brent and U.S. crude remain more than 10% higher for the week after escalating attacks disrupted Middle Eastern energy routes. The market now faces competing forces: restricted physical supply is supporting prices, while diplomatic talks and weaker global demand forecasts could prevent another uncontrolled advance.

Hormuz Disruption Keeps Oil Above $100

Brent crude fell 1.5% to $105.99 a barrel by 0643 GMT Friday, while West Texas Intermediate declined 1.3% to $101.20. Both contracts had surged more than 6% Thursday and remained more than 10% higher for the week. The supply problem is increasingly physical rather than speculative.

Only seven vessels crossed the Strait of Hormuz on September 10, according to shipping data cited by Reuters. That compares with a 10-day average of 15 and approximately 125 daily transits before the Iran war. The strait is one of the world’s most important energy corridors, making sustained restrictions significant for crude and liquefied-natural-gas markets.

Risk has also expanded into the Red Sea. Iran-aligned Houthi forces seized Yemen’s strategically located port of Mocha and advanced toward areas close to the Bab el-Mandeb Strait, another major shipping route. The development has increased concern about Saudi oil exports and commercial vessels operating between the Red Sea and Gulf of Aden.

Diplomacy Pulls Brent From $110

Friday’s decline followed reports that Gulf foreign ministers are preparing talks with Iran aimed at establishing temporary arrangements for shipping through Hormuz.

The discussions are expected to involve Gulf Cooperation Council governments and Iran, with Oman playing an important diplomatic role. Any agreement improving vessel access could restore part of the disrupted energy flow and reduce the geopolitical premium embedded in crude prices. That possibility helped pull Brent back after it briefly reached a four-month high of $109.97 on Friday.

Still, the economic consequences of the recent rally are already spreading beyond crude markets. U.S. diesel prices moved above $6 per gallon, while higher energy costs have pushed government bond yields upward as investors reassess inflation and central-bank policy.

OPEC Cuts 2026 Demand Forecast

Supply disruption is supporting prices, but the demand outlook is becoming less favorable. OPEC lowered its forecast for 2026 global oil-demand growth to 380,000 barrels per day, its fifth consecutive downward revision. The organization nevertheless remains more optimistic about consumption than some other major energy forecasters.

OPEC+ has also avoided adding another production adjustment for October. Seven participating producers, including Saudi Arabia and Russia, agreed on September 6 to maintain September production requirements into next month. The combination means oil’s next major move will depend heavily on whether disrupted Middle Eastern barrels return to the market.

Conclusion

Oil’s move above $100 reflects a measurable deterioration in physical supply conditions. Hormuz traffic has collapsed from pre-war levels, risks have spread toward the Red Sea, and Brent briefly approached $110.

Diplomatic progress could quickly remove part of that risk premium, while OPEC’s weaker demand forecast creates another restraint on prices.

For now, $100 remains the critical threshold. Continued disruption through Hormuz and Bab el-Mandeb could keep Brent elevated and reopen the path toward $110 or higher. A credible shipping agreement would change that calculation by restoring flows and shifting attention back toward slowing demand.