Brent crude oil hit $100 a barrel as experts warn rates could stay higher for longer

Oil hit $100 a barrel again this morning as new strikes in the Middle East increased fuel supply concerns.

Brent crude was on the verge of reaching the milestone on Tuesday evening, rising to $99.46 per barrel, the highest level since July 24. This morning the price reached $100 before falling to $99.97.

This week, attacks by the Iran-backed Houthis on Saudi energy facilities set oil installations on fire and threaten to escalate the conflict.

Oil prices have risen more than 30 percent since the US-Iran war began more than six months ago, but the benchmark is well below the all-time high of above $126 per barrel reached in late April 2026.

The conflict in the Middle East has disrupted oil flows through two vital arteries, the Strait of Hormuz and the Red Sea.

The Strait of Hormuz, which previously channeled about 20 percent of the world’s oil, now handles only a fraction of normal traffic and shippers and ships using the waterway face attacks.

Higher oil prices could have major consequences for households in Britain.

Dan Coatsworth, head of markets at AJ Bell, said: ‘This has major implications for personal finance, corporate profits and financial markets.’

Coatsworth said higher oil prices mean central banks, such as the Bank of England in Britain, can maintain their support interest rates stay higher for longer or consider further rate hikes if inflationary pressures increase.

Maintaining higher interest rates for longer will increase pressure on households mortgage interestalthough this is better news for savers.

Many major lenders have already increased their mortgage rates in recent days.

Investment bank Goldman Sachs raised its Brent and WTI price forecasts by $5 to $85 and $80 for December 2026 and to $80 and $75 for 2027, respectively, reflecting the assumption that shipping disruptions in the Middle East will continue into 2027.

“Markets are increasingly pricing in a protracted conflict,” Goldman Sachs analysts wrote in a note today.

HSBC also raised its 2026 Brent forecasts to $90 per barrel from $80 previously, including a $95 estimate for the fourth quarter of 2026. It raised its 2027 forecast to $85 per barrel from $65.

Global diesel supplies appear likely to remain tight due to a lack of spare refining capacity, Russia’s export ban and looming peak winter demand, senior industry executives said.

Operations at some energy facilities in Saudi Arabia, the world’s biggest oil exporter, were halted today after attacks by Iran-aligned Yemeni Houthis that wounded 73 people, in what Saudi authorities called a dangerous escalation.

Iran threatened the US with “economic warfare” and said it had fired an advanced missile at US warships.

And on Saturday, US forces attacked three Iranian oil tankers, including one near Kharg Island, Iran’s main oil export hub, according to US Central Command.

The attacks followed attacks by Iran’s Revolutionary Guards on US warships operating in the region.

Coatsworth said: ‘Oil price developments have played a key role in the recent bond market troubles, with bond yields jumping in light of renewed tensions between the US and Iran.

‘The conflict in the Middle East has flared up again after a brief hiatus earlier this summer, raising market concerns about oil supplies and refining cuts.

‘Oil prices and financial markets are closely linked – oil is an essential fuel for the global economy.

‘Movements in oil prices can influence business and consumer confidence, influence spending decisions and contribute to them inflationwhich ultimately impacts corporate profits, economic growth and interest rates.”

Coatsworth said that over the past 20 years, the global stock market, as measured by the FTSE All World Index, fell in two out of four cases where oil prices traded at $90 or higher for more than two months in a row.