KUALA LUMPUR: Brent crude oil prices have remained above US$100 per barrel today amid the escalating United States-Iran conflict, reigniting fears over global energy supplies.
Global benchmark Brent crude eased 0.63 per cent to US$100.10 per barrel at 9.43 am following consecutive US military strikes against Iran.
Higher oil prices typically lead to petrol and diesel becoming more expensive.
SPI Asset Management managing partner Stephen Innes said the escalation largely rests with Iran now and if Tehran or its Houthi proxies continue attacking ships in the Strait of Hormuz or the Red Sea, the US is likely to retaliate, pushing the current tit-for-tat exchange into a far more dangerous phase.
For background, on Wednesday, oil prices spiked after Houthi militia in Yemen attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has used to bypass the Strait of Hormuz.
He added that the risk would rise considerably if the Islamic Revolutionary Guard Corps (IRGC) were to target energy infrastructure in the neighbouring countries, as that could broaden the conflict and deepen existing supply disruptions at a time when global inventory buffers are already under considerable strain.
"As we have seen in the past, this could change quickly if olive branch diplomacy starts to appear again, but right now that is not the market base case over the short term, so yes, oil could remain elevated over a two-week horizon.
"Over the two-week period, I anticipate Brent prices to range between US$95 and US$105. However, the longer the escalation continues, the higher prices are likely to rise until we reach demand destruction, which is projected around the US$120 level,” Innes told Bernama.
Brent crude is up roughly by 65.5 per cent year-to-date, based on Thursday’s US$100.69 close versus the Dec 31, 2025 settlement of US$60.85.
Oil prices was stabilising recently following a temporary US-Iran ceasefire.
Early today, the US launched its 13th consecutive night of strikes against Iran amid reports that Iranian officials had rejected a US ceasefire proposal carried to Tehran by the leader of Iraq.
Rystad Energy vice president for commodity markets (oil) Janiv Shah said the direction of prices will ultimately depend on three factors as the conflict evolved, whether crude flows into Asia can be maintained, whether refiners can adapt to a changing mix of crude grades, and how geopolitical developments unfold.
"The probability of higher prices increases as the conflict escalates, but the magnitude of that increase will depend on how these physical market dynamics play out," he said in a note today.
Janiv said Saudi exports from the Yanbu port, a major Saudi Arabian energy and shipping hub on the Red Sea coast, remain critical as about 4 million barrels per day (bpd) exits the terminal, with about 2.5 million bpd continuing south through Bab el-Mandeb.
He said this assumes the route stays operational, although current threats and recent attacks keep freight and insurance costs elevated. He said if the current market flow dynamics persist and/or worsen, prices are likely to rise in the coming weeks given the global crude and liquids balance deficit.
"Strategic petroleum release can cap spikes but cannot correct the crude slate mismatch. Asian refineries short of sour feedstock may cut runs, even when light sweet barrels are available, preventing high margins from generating a full supply response and keeping diesel and jet cracks strong,” Janiv said. - Bernama
