Global oil prices surged back above the psychologically important $100-a-barrel level on Wednesday as the escalating US-Iran conflict and renewed Houthi attacks on Saudi energy infrastructure raised fears of a prolonged disruption to crude supplies and shipping routes.

Brent crude, the international benchmark, climbed above $100 a barrel for the first time since July 24. It later traded around $100.66 a barrel, up roughly 2.8%, while US West Texas Intermediate (WTI) crude rose about 3% to around $95.77. The latest move extends a sharp recovery in oil prices after crude had retreated from earlier wartime highs.

The latest rally came after a new series of military attacks involving the United States, Iran and the Iran-backed Houthi movement in Yemen. The developments have increased concern that the conflict could affect not only oil production but also the movement of crude and petroleum products through some of the world's most important shipping corridors.

What Triggered the Oil Price Surge

The immediate catalyst was a fresh escalation between Washington and Tehran.

The US Central Command said its forces destroyed five Iranian crude oil carriers on September 8 after the Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles on two occasions. Four vessels — Kaviz, Charminar, Horizon 1 and Riesco — were struck in the Gulf of Oman, while the fifth, Derya, was destroyed near Kharg Island, a major Iranian oil-export hub.

CENTCOM said the crews were ordered to abandon the vessels before the ships were struck and that no US personnel were injured in the earlier missile attacks.

Iran subsequently claimed that its forces retaliated against US military assets and commercial shipping in the region. Iranian officials said the IRGC Navy had attacked two US Navy destroyers and eight oil tankers around the Strait of Hormuz. The US military disputed the claim that its warships had been damaged.

The conflicting claims have added another layer of uncertainty for shipping companies and oil traders, who are already dealing with reduced flows through the region.

Houthi Attacks Add Pressure

The oil market was also reacting to attacks by Iran-backed Houthi forces in Yemen against Saudi Arabia.

The Houthis reportedly launched missiles and drones towards Saudi cities and energy facilities, with attacks affecting areas including Jazan, Abha and Najran. Reports said oil installations were set ablaze and dozens of people were injured.

The attacks are significant because Saudi Arabia is one of the world's most important oil producers and exporters. Any sustained damage to its production, refining or transportation infrastructure could tighten global supplies at a time when the market is already unusually sensitive to disruptions.

The Houthi attacks also threaten shipping through the Red Sea, which has become an increasingly important alternative route for vessels seeking to avoid the Strait of Hormuz.

Why the Strait of Hormuz Matters

At the centre of the oil market's concerns is the Strait of Hormuz, the narrow waterway connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea.

The route is one of the world's most important energy chokepoints. According to the US Energy Information Administration, oil flows through Hormuz averaged about 20.9 million barrels per day in the first half of 2025, equivalent to around 20% of global petroleum liquids consumption. About 89% of the crude oil and condensate moving through the strait went to Asian markets.

The waterway is particularly important for countries such as China, India, Japan and South Korea, which together accounted for a large share of crude shipments passing through Hormuz.

Hormuz is also crucial for the LNG market. The EIA estimates that roughly one-fifth of global LNG trade moved through the strait in 2024, with Qatar responsible for the majority of those shipments from the Persian Gulf.

That makes any prolonged disruption potentially damaging well beyond the crude oil market.

Oil Supply Flows Already Under Pressure

The latest price increase comes after months of volatility in the oil market.

Reuters reported that crude flows through the Strait of Hormuz had recovered to around 8 million to 9 million barrels per day shortly before fighting resumed on August 30, but subsequently dropped below 2 million barrels per day. The International Energy Agency has also projected that global oil supply could fall by about 4.3 million barrels per day this year.

That combination has made traders increasingly sensitive to every new attack involving oil tankers, ports, pipelines or production facilities.

Brent has risen by roughly a quarter since early August, according to Reuters, and the benchmark is now more than 60% higher than at the start of the year.

The market is therefore not reacting only to the barrels already lost. Traders are also pricing in the possibility that further attacks could remove additional supply or make shipping insurance and transportation substantially more expensive.

What $100 Oil Means for Consumers

Higher crude prices eventually feed into the cost of refined petroleum products.

When crude becomes more expensive, refiners generally face higher input costs, which can translate into increased prices for petrol, diesel, aviation fuel and other petroleum products. Transportation costs can then rise across the wider economy.

The impact is particularly important for countries that import a large proportion of their crude requirements.

Higher fuel prices can increase freight costs, raise operating expenses for businesses and put additional pressure on household budgets. They can also make inflation more difficult for central banks to control.

The latest oil rally has already renewed concerns about inflation and interest rates in several major economies.

Asia Faces Particular Energy Risk

Asian economies are especially exposed to the situation because much of the crude and LNG passing through Hormuz is destined for Asia.

India, China, Japan and South Korea are among the largest destinations for crude transported through the waterway.

For India, sustained increases in international crude prices could affect the country's import bill, trade balance and broader inflation outlook. The impact on domestic fuel prices would depend on international crude prices, the rupee-dollar exchange rate, refinery margins, taxes and domestic pricing decisions.

Higher crude prices can also put pressure on sectors such as aviation, logistics, chemicals, manufacturing and transportation.

Markets Watch for a Wider Supply Shock

Oil traders are now watching several developments simultaneously: military activity around the Strait of Hormuz, the security of commercial tankers, Saudi energy infrastructure, Iranian export facilities and the availability of alternative shipping routes.

The market is also monitoring whether the latest attacks remain limited or develop into a wider campaign against energy infrastructure.

The US Energy Information Administration notes that Saudi Arabia, the United Arab Emirates and Iran have pipeline infrastructure that can bypass part of the Strait of Hormuz, but those alternatives can move only a portion of the volumes normally transported through the waterway.

That limited spare route capacity is one reason the market remains vulnerable to a prolonged closure or severe restriction of Hormuz.

Key Takeaways

Brent crosses $100: The global oil benchmark moved above $100 a barrel for the first time since July 24.
US strikes Iranian tankers: US Central Command said it destroyed five Iranian crude carriers following Iranian missile attacks targeting a US warship.
Houthi attacks intensify: Iran-backed Houthis targeted Saudi locations and energy infrastructure, adding another threat to regional oil supplies and shipping.
Hormuz remains critical: Around 20.9 million barrels per day of oil flowed through the Strait of Hormuz in the first half of 2025, according to the EIA.
Asia is highly exposed: China, India, Japan and South Korea are among the major destinations for oil transported through the waterway.
Inflation risks are rising: Sustained higher crude prices could increase fuel, transportation and production costs worldwide.
Further escalation is the key risk: A wider attack on oil infrastructure or commercial shipping could push prices significantly higher.

Why This Matters

The return of oil to $100 a barrel is more than a psychological milestone for energy markets. It signals that traders are increasingly pricing a risk that the Middle East conflict could become a sustained threat to the global oil supply chain. The combination of attacks on tankers, pressure on Saudi energy infrastructure and uncertainty around the Strait of Hormuz creates multiple potential points of disruption.

The immediate direction of crude prices will depend heavily on whether shipping through Hormuz can stabilise and whether attacks on energy infrastructure continue. If the conflict remains contained, prices could eventually retreat as traders reassess the actual loss of supply. But a prolonged disruption could have much broader consequences, particularly for fuel prices, inflation, freight costs and interest-rate decisions.

For consumers and businesses, the key issue is therefore not simply whether Brent remains above $100 for a few days, but whether the current military escalation develops into a longer-lasting energy supply shock.

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