Today's Edition
HOUSTON (REUTERS)
Brent crude futures breached $100 a barrel on Wednesday For the first time since late July, as Iran and the US hit tankers in the biggest wave of attacks on shipping since the war began.
Front-month Brent crude futures were up $3.40, or 3.5%, at $101.32 a barrel as of 11:15 am ET (1515 GMT), after touching a high of $101.55. US West Texas Intermediate crude was up $3.45, or 3.7%, at $96.48 a barrel, highest since early June.
Since late May, oil benchmarks have generally traded well below the $100-per-barrel psychological threshold, reflecting expectations that the conflict would remain on a low simmer. Optimism rose in particular after the US and Iran came to a temporary agreement to cease attacks, even though a permanent peace deal had not been reached.
That calculus has been shifting of late with the assumption of strikes. Iran said on Wednesday it had attacked 10 ships near the Strait of Hormuz and the US sank five Iranian oil tankers, in a sharp escalation of the six-month-old war.
Since the Iran war began on February 28, Brent has surged as high as $126.41 a barrel, a peak reached on April 30, but had only briefly touched $100 a barrel in late July after retreating below that threshold in late May.
The contracts were headed for their biggest daily rises in percentage terms since September 1.
In the physical crude oil market, the dated Brent oil benchmark, against which roughly two-thirds of supply is priced, has been above $100 per barrel since September 3, according to LSEG data.
Physical oil markets, linked to prompter deliveries than futures contracts which typically start a month out, react quickly to supply disruptions as buyers need to go into the market quickly to seek alternative cargoes.
Meanwhile, consumers have been paying the equivalent of more than $100 a barrel for their oil in the form of refined fuels such as gasoline and diesel for most of this year, as conflicts created a global refining crunch which sent fuel prices soaring even relative to crude.
