Oil climbs near $94: could Hormuz and Red Sea risks send Brent through $100 soon?

Oil prices steadied near four-week highs on Friday and were headed for a second weekly advance as the unresolved US-Iran conflict kept Middle East supply risks elevated.

Brent crude was around $93.5 a barrel in early Asian trade after touching $94.71 on Thursday, its highest since late July.

WTI traded near $86.5 after gaining 2.3% in the previous session. Both benchmarks eased modestly on Friday after five straight days of gains, but Brent was still up more than 5% for the week and WTI was also firmly positive.

Hormuz keeps the risk premium in Brent

The Strait of Hormuz remains the market’s main pressure point.

Only seven commodity vessels crossed the waterway on Thursday, down from 14 a day earlier, according to Kpler tracking data. Before the conflict, close to one-fifth of global oil consumption moved through the strait.

That helps explain why Brent, the global benchmark, has remained close to $94 even as traders take profits.

The market is pricing the possibility that reduced Gulf exports from producers including Saudi Arabia, Iraq, the UAE and Kuwait could persist if shipping conditions fail to normalise.

IG analyst Tony Sycamore sees Washington and Tehran as increasingly entrenched, leaving crude vulnerable to further gains while neither side has much room to let the confrontation drag on indefinitely.

BMI, part of Fitch Solutions, also sees risks to its Brent outlook skewed higher because disruption now spans both Hormuz and the Red Sea.

Red Sea attacks widen the supply threat

The risk is no longer concentrated in the Persian Gulf.

Yemen’s Iran-backed Houthis said they targeted eight Saudi oil tankers between July 20 and August 19, including five in the Red Sea and three in the Gulf of Aden and Arabian Sea.

The group also claimed it had forced dozens of Saudi tankers away from regional routes.

Those claims have not been independently verified, but they underline why tanker operators remain cautious around Bab el-Mandeb as well as Hormuz.

The twin-chokepoint problem matters because rerouting vessels around the Cape of Good Hope adds time and freight costs, even when barrels eventually reach buyers.

It also increases Brent’s sensitivity to fresh attacks, shipping restrictions or insurance disruptions.

US sanctions add another layer of uncertainty

Washington is meanwhile shifting more pressure onto Iran’s economy.

President Donald Trump has threatened severe penalties for countries and companies that continue supporting Tehran, while the US Treasury has already expanded its Economic Fury campaign against Iranian oil, shipping and financial networks.

Treasury actions this summer have targeted vessels, trading companies and sanctions-evasion networks linked to Iranian crude sales, including operations involving China and other overseas intermediaries.

That raises the prospect of tighter enforcement against Iranian exports at the same time shipping through Hormuz remains constrained.

Yet the market is stopping short of pricing a full supply shock. Higher prices can weaken demand, while alternative pipelines, rerouting and inventories provide some cushion.