Brent Crude Tops $100 for First Time in Three Months

Brent crude pushed past $100 a barrel on Tuesday, a level not seen in a quarter of a year, after Iran-backed Houthi fighters attacked oil infrastructure in southern Saudi Arabia.

The global benchmark hit $100.03. A short-lived move above that threshold in late August had reversed on the same day, meaning Brent had not closed above $100 since May.

Houthi Drones Strike Four Saudi Cities

On Tuesday, Houthi forces fired dozens of drones and ballistic missiles at Abha, Jazan, Najran and Khamis Mushait.

Blazes ignited at Saudi Aramco facilities and 73 people were wounded, among them women and children. Jazan is home to a refinery that processes 400,000 barrels daily.

Saudi military spokesman Maj. Gen. Turki al-Malki described the attack as a major escalation and said deterrence measures would follow.

The strikes came after US forces hit three Iranian oil tankers over the weekend. Behind both events lies the ongoing conflict between the United States and Iran, now in its seventh month.

Last week, analysts had noted that renewed hostilities had driven oil to a five-week high. Since then, prices have risen by about $5.

Hormuz Traffic Drops Sharply Again

Before hostilities resumed on August 30, shipping through the Strait of Hormuz carried 8 million to 9 million barrels a day. Flows subsequently fell below 2 million, according to Rystad Energy chief economist Claudio Galimberti.

Gulf crude exports now run at roughly 11 million barrels a day, compared with 18 million before the war. Physical grades are even tighter, with Dubai and Oman trading between $104 and $105.

“Physically things are incredibly tight.”

David Fyfe, chief economist at Argus Media, said diesel markets are “screaming shortage.” European gas prices reached a three-year high last week, indicating the squeeze extends beyond crude.

What Comes Next

Goldman Sachs increased its Brent forecast by $5 on Tuesday, to $85 for December and $80 for 2027. The bank pointed to a possible rise above $120 if Gulf output remains 4 million barrels a day below pre-war levels.

Energy is already pushing up US inflation. Consumer prices rose 3.4% year-on-year in July. Gasoline climbed 24.6% and the broader energy index 14.7%, while core inflation stood at 2.5%.

August data arrive Friday. Meanwhile, Iran has responded to new US proposals with conditions relayed through intermediaries, so the Hormuz standoff shows few signs of easing.