Brent hits a three-week high: could latest Hormuz disruption push crude towards $100?

Oil prices extended their advance on Wednesday as renewed uncertainty over the Strait of Hormuz kept supply risks firmly in focus, pushing Brent above $91 a barrel and WTI towards $86.

Brent crude futures rose about 0.8% to $91.71 in Asian trading, while US West Texas Intermediate gained roughly 0.9% to $85.70.

Both benchmarks were on course for a fourth straight daily increase after settling at their highest levels in more than three weeks on Tuesday.

The latest move reflects a market that is again paying for geopolitical risk rather than a sudden improvement in demand.

Washington and Tehran continue to offer conflicting accounts of whether Hormuz is fully open, while shipping activity through the waterway remains constrained.

Hormuz risk is back in the oil price

President Donald Trump said the Strait of Hormuz was open and operating, even as Iran maintained that the waterway would remain restricted until the US met its conditions.

Ship traffic fell sharply last week, with confirmed crossings down 19.5% to 95, according to Kpler data reported by AP.

The security backdrop has also deteriorated.

A projectile damaged a vessel in the strait near Oman this week, while the UAE said two ballistic missiles were launched from Iran towards its territory. Iran denied the accusation.

Sparta Commodities analyst June Goh sees the renewed threats around both Hormuz and Bab el-Mandeb as supportive for crude in the near term, particularly while shipowners remain reluctant to use the region’s key chokepoints.

Alternative routes may limit the upside

The bullish case is not entirely one-way. Gulf producers are increasingly looking for ways to move barrels without relying on Hormuz, which could soften the impact of any prolonged disruption.

Iraq has approved temporary mechanisms to export crude through alternative outlets from September, while some Chinese shipping companies have stopped sending tankers through Hormuz and Bab el-Mandeb and are instead collecting cargoes outside the Gulf.

The EIA estimates that just 4.9 million barrels a day of crude and petroleum liquids moved through Hormuz in the second quarter, down from 21.6 million barrels a day before the conflict.

It expects flows to remain severely constrained through August before recovering gradually.

That matters for the medium-term price outlook. The EIA expects Brent to average about $85 in the third quarter and $78 in the fourth as production restarts and inventories rebuild.

Demand and inventories remain the counterweight

Beyond geopolitics, the oil market still faces a softer demand picture.

OPEC now expects global consumption to grow by only 600,000 barrels a day in 2026, with almost all the increase coming from non-OECD economies.

The IEA is more cautious, projecting global oil demand to decline by about 1 million barrels a day this year before rebounding in 2027.

Its outlook makes any sustained recovery in Gulf exports an important potential brake on prices.

US inventories are another near-term test. Industry data pointed to declines in crude and distillate stocks last week, while gasoline inventories increased. Official EIA figures are due later Wednesday.

For now, Brent above $91 and WTI near $86 show traders are still assigning a sizeable premium to supply disruption.

Whether that premium lasts will depend less on technical momentum than on how quickly tankers can move through, or around, the Middle East’s most important oil routes.