Oil Prices Head for First Weekly Close Above $100 Since Mid-May as Middle East Conflict Intensifies
Why It MattersSustained Middle East conflict and disrupted shipping lanes are pushing oil prices and refined-fuel costs sharply higher, raising input costs across transport and aviation sectors dependent on jet fuel and diesel.
Oil prices rose on Friday, September 11, with both major benchmarks on track to end the week above $100 a barrel for the first time since mid-May, driven by escalating conflict in the Middle East and fears of prolonged supply disruptions. Brent crude futures climbed $1.05, or 1%, to $108.68 a barrel by 0045 GMT, while U.S. West Texas Intermediate crude rose 95 cents, also 1%, to $103.45 a barrel. Both benchmarks had surged more than 6% on Thursday and were trading nearly 13% higher on a weekly basis — the steepest weekly gain since the week ended July 17.
Iran-aligned Houthis seized control of Yemen's port of Mocha on Thursday, posing a further threat to Red Sea shipping traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified. Attacks from Yemen on Saudi energy facilities marked an escalation beyond Iran and the Strait of Hormuz, raising fears of prolonged disruptions across the broader region, analysts said. U.S. President Donald Trump warned that the U.S. may strike Iran's Pickaxe Mountain, located near the heavily damaged Natanz uranium enrichment facility, and said the war would end after the November midterm elections.
Iran said it had attacked 10 ships near the strait on Wednesday, following U.S. strikes on five Iranian oil tankers. Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks. IG analyst Tony Sycamore said that with events spiralling and Iran showing it is willing to stretch the conflict as wide and as long as it can, it is becoming increasingly likely that WTI crude will retest the $119.48 high from early March.
The U.S. national average price of diesel surpassed $6 a gallon for the first time ever on Thursday, price tracker GasBuddy said, as the U.S.-Iran conflict and Ukrainian attacks on Russia's refineries have squeezed supply. Analysts said the rally's durability will hinge on China, the world's largest crude importer, with continued Chinese buying potentially amplifying the impact of supply disruptions and pushing prices higher.
Separately, OPEC lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, marking the fifth consecutive downward revision, while OPEC oil output fell by 640,000 barrels per day in August.
