Oil Price Today: WTI Holds Above $100 as US-Iran Conflict Deepens Supply Fears

Key Takeaways

• WTI crude settled at $103.95 on September 10, while Brent closed at $109.29, leaving both benchmarks at their highest levels since early May.
• Escalating attacks around the Strait of Hormuz and rising security risks near the Bab el-Mandeb Strait have increased concerns about prolonged disruptions to Middle East oil exports.
• Tight physical supplies and declining US crude inventories are supporting prices, although any diplomatic breakthrough could trigger a rapid reversal in the geopolitical risk premium.

WTI Crude Tops $100 as Brent Approaches $110

Oil prices remained above $100 per barrel on Friday as escalating conflict between the United States and Iran intensified concerns about supplies moving through the Middle East.

West Texas Intermediate crude settled 8.2% higher at $103.95 per barrel on Thursday, September 10. Brent crude gained 7.98% to $109.29, after approaching $110 during the session. Both benchmarks recorded their highest closes since early May.

Prices continued to trade firmly during Friday’s Asian session. Brent futures were near $108.68 at 00:45 GMT, while WTI stood around $103.45. Both contracts were heading towards weekly gains of almost 13%, their strongest performance since July.

The latest advance has taken WTI from around $90 at the beginning of September to above $100 in less than two weeks. Brent has moved through the psychologically important $100 and $105 levels, reflecting a sharp increase in the geopolitical risk premium attached to physical crude supplies.

Tanker Attacks Increase Strait of Hormuz Risks

The rally accelerated after another round of retaliatory attacks involving US and Iranian forces near the Strait of Hormuz.

Iran said it targeted 10 vessels in the area after US forces struck five Iranian tankers. Iranian officials described the action as retaliation and warned that the scope of future operations could expand if attacks on Iranian shipping continued.

US officials disputed parts of Iran’s account, including claims that American vessels had been hit. The competing statements highlight the difficulty of independently confirming developments in an increasingly restricted maritime environment.

For the oil market, the main concern is not limited to the immediate loss of individual vessels. Repeated attacks can discourage tanker operators from entering the region, increase insurance premiums and slow the movement of available cargoes. Even when production facilities remain operational, restricted shipping capacity can prevent crude from reaching international buyers.

The duration of the disruption is therefore becoming as important as the intensity of the military conflict. A prolonged period of reduced tanker traffic could keep physical supplies tight and maintain upward pressure on prompt oil contracts.

Red Sea Disruption Adds a Second Supply Threat

Pressure on global shipping has also expanded beyond the Persian Gulf. Iran-aligned Houthi forces took control of the Yemeni port of Mokha, raising concerns about security near the Bab el-Mandeb Strait.

Bab el-Mandeb connects the Red Sea with the Gulf of Aden and the Indian Ocean. It provides access to the Suez Canal and is an important route for crude oil, refined fuels and commercial cargoes travelling between Asia and Europe.

The development matters because the Red Sea had served as one of the alternative routes for some Gulf exports affected by restrictions around Hormuz. Simultaneous disruption at both chokepoints would leave exporters with fewer options and could require longer, more expensive voyages around southern Africa.

Before the current conflict, approximately 20 million barrels per day of oil moved through the Strait of Hormuz, equivalent to about 20% of global petroleum-liquid consumption. More than one-quarter of global seaborne oil trade passed through the waterway, while around one-fifth of international LNG trade also used the route. Only about 2.6 million barrels per day of spare Saudi and UAE pipeline capacity was estimated to be available to bypass the strait.

Asian economies face particularly high exposure. China, India, Japan and South Korea were the leading Asian destinations for crude transport through Hormuz, making regional refiners sensitive to changes in Gulf export availability.

Physical Oil Supplies Show Signs of Tightening

The impact of the conflict is increasingly visible in physical oil markets. Asian refiners have sought additional barrels from West Africa, Canada and South America as Gulf supplies become more difficult to secure.

That shift can raise the premiums paid for immediately available crude while increasing freight costs for longer-distance cargoes. Rising tanker rates may also widen the effective cost of importing oil even when benchmark futures prices remain unchanged.

A survey of the 11 OPEC members estimated that August crude production fell by 640,000 barrels per day to 19.71 million barrels per day as Saudi and Iranian exports faced disruption.

OPEC’s broader Declaration of Cooperation series, which includes participating non-OPEC producers, showed output rising by 300,000 barrels per day to 38.05 million barrels per day. The difference reflects the two datasets’ different producer groups and measurement methods. OPEC also reported stronger demand for prompt-loading cargoes and reduced global crude availability during August.

US inventories offered additional support. Commercial crude stocks excluding the Strategic Petroleum Reserve fell by 400,000 barrels to 424.1 million in the week ending September 4. Distillate inventories increased but remained 13% below their five-year average, leaving fuel markets vulnerable to further supply interruptions.

Higher Oil Prices Add to Inflation and Interest-Rate Risks

The oil surge is also affecting equities and government bonds. The S&P 500, Dow Jones and Nasdaq each fell between 0.6% and 0.7% on Thursday, while the US 10-year Treasury yield climbed to 4.95%.

Sustained crude prices above $100 could increase transport, manufacturing and agricultural costs. That may slow the decline in consumer inflation and reduce the scope for major central banks to ease monetary policy.

Energy producers and oilfield-services companies may benefit from stronger prices, but airlines, logistics companies, chemical producers and other fuel-intensive industries face higher operating costs. Consumer-facing businesses could also experience weaker demand if rising petrol and utility bills reduce household purchasing power.

Can Brent Break Above $110?

Brent is now testing the $110 area, while WTI is attempting to establish support above $100. A sustained move higher would probably require evidence that Gulf or Red Sea export volumes are deteriorating further.

Additional tanker attacks, damage to major production infrastructure or a broader restriction on Bab el-Mandeb traffic could push prices beyond their current range. Strong crude demand from Asian refiners would reinforce that pressure.

However, oil prices remain highly sensitive to political developments. A ceasefire, reopening of shipping routes, release of strategic reserves or faster restoration of export capacity could remove part of the geopolitical premium quickly.

Demand conditions also remain an important counterweight. High fuel prices can reduce consumption, while slower economic growth or a stronger US dollar could limit further gains. Traders are therefore likely to focus on verified shipping flows, physical crude premiums, tanker rates, inventory reports and diplomatic developments rather than headline price levels alone.