The price of oil has risen above $95 a barrel for the first time in six weeks as escalating Middle East conflict threatens further disruption to global supplies. Brent crude reached $95.24 on Wednesday before easing to $94.40, up more than 3% on the previous day. The rise comes as renewed US-Iran aggression over the Strait of Hormuz is compounded by Houthi threats to target vessels carrying Saudi oil through the Bab el-Mandeb strait.
Brent crude peaked at $126 a barrel in April but had fallen to as low as $71 at the start of July. The price has shot up again following an 11th night of strikes on Iran, including on aircraft hangars and drone storage sites. US President Donald Trump warned he would destroy a bridge or power plant each time Iran shoots at a ship in the strait, to which Iran’s foreign minister, Abbas Araghchi, responded on X: “Our defence doctrine is clear: eye for an eye.”
Both sides have increasingly targeted civilian infrastructure, with Iran hitting energy installations and desalination plants in neighbouring Gulf countries. International law generally prohibits such attacks unless the infrastructure is used for military purposes. United Nations Secretary General António Guterres described them as unacceptable on Tuesday.
Analysts at Goldman Sachs have warned that oil prices could reach $120 a barrel by the end of the year unless exports via Hormuz restart. The head of the International Energy Agency (IEA), Fatih Birol, said global markets had so far benefited from “cushioning factors”, including the release of around 400 million barrels of emergency oil and increased exports from Europe and the Americas. However, he cautioned that refinery activity and product supplies had not kept pace with crude deliveries, leaving markets for diesel and gasoline considerably tighter.
Birol stressed that a “resolution to the ongoing conflict that includes a full and unconditional reopening of the strait of Hormuz” was essential to avoid further deterioration in global energy security. Meanwhile, Norway’s state oil company, Equinor, reported that its profits nearly doubled to $11.5bn in the three months to the end of June, boosted by the jump in oil and gas prices caused by the war against Iran.
