Brent crude oil hits $100 a barrel for first time since July 24

Fresh updates from the financial markets indicate that Brent crude prices were trading at $100 a barrel on Wednesday for the first time since July, as escalating attacks across the Middle East fuelled concerns over disruptions to oil supplies from the region.

US struck Iranian tankers near the vital crude-export hub of Kharg Island, stoking fears of deeper disruptions in the Strait of Hormuz.

Brent crude prices have jumped by a quarter since early August as hopes for a permanent resolution to the six-month-old war faded and as fighting flared again. The global crude benchmark is up more than 60% this year.

The Middle East war intensified on Tuesday with Iranian-backed Houthis in Yemen rolling out strikes on several Saudi cities, further embroiling a U.S. ally in the conflict.

In a sharp escalation of the six-month-old war, U.S. forces hit multiple Iranian oil tankers and Iran targeted a U.S. base in Jordan and attacked ships.

"Bullish momentum is building in crude markets as Brent crude approaches the psychologically important $100-per-barrel mark," stated Priyanka Sachdeva, head of market insights at Phillip ⁠Nova.

Renewed attacks on energy infrastructure stemming from the war between Iran and the US risk keeping crude prices elevated and complicating the outlook for inflation and interest rates. Market participants will be watching to see whether the latest escalation further disrupts supplies, with Friday’s US consumer-price index data set to provide the next major test of expectations for a The US central bank rate gain at its Sept. 15-16 meeting.

"Iran's attacks on Saudi energy facilities and the subsequent destruction of five Iranian tankers boosted concerns around another prolonged disruption to oil supplies," OCBC market watchers stated in a note.

Market watchers additionally stated that elevated crude prices have stoked inflation fears, especially in Asia, as many economies are heavily dependent on imported energy.

"$100 Brent should not be viewed simply as a psychological milestone. It is a warning level for the broader economy," Sachdeva stated.