Oil prices moved closer to $100 a barrel as fresh military action in the Middle East increased concerns about global energy supplies and shipping.
Brent crude rose about 1.4% to $99.33 a barrel, while US West Texas Intermediate crude climbed to around $94.34 a barrel.
Brent has gained about 25% since the beginning of August as investors have become increasingly concerned about the possibility of supply disruptions caused by the escalating conflict.
Growing risks to oil supplies
Recent attacks across the region have heightened concerns about the security of oil infrastructure and shipping routes.
The Houthis have attacked cities in Saudi Arabia, while the United States has carried out strikes on Iranian oil tankers.
Iran has also launched an attack on a US base in Jordan, further increasing fears that the conflict could expand and create wider disruption across the region.
For oil traders, the major concern is whether the military escalation will affect the production, transportation or export of crude oil.
Shipping routes under pressure
The Middle East is home to some of the world’s most important oil-producing countries and shipping routes.
Any disruption to tanker movements could force vessels to take longer routes, increasing transportation costs and potentially delaying deliveries.
Insurance costs for ships operating in high-risk areas could also rise as security concerns increase.
Impact on consumers and businesses
A sustained rise in crude prices could have consequences beyond the energy sector.
Higher oil prices can increase the cost of fuel, transportation and industrial production, while also adding pressure to inflation in countries that depend heavily on imported energy.
Central banks could therefore face a difficult situation if energy prices remain elevated for an extended period.
Investors are closely watching developments in the region to determine whether the latest rise in oil prices will continue or ease if tensions decline.
For now, the combination of military escalation, shipping risks and concerns over supply is keeping crude prices close to the psychologically important $100-a-barrel level.
