Oil hits $100 amid deepening supply crisis

Crude oil prices are on track for their biggest weekly gain in months, with the commodity breaking the $100 per barrel mark today as global supply chains face mounting disruption. The surge comes as the Strait of Hormuz remains effectively paralyzed and the Bab el-Mandeb Strait in the Red Sea becomes a flashpoint for shipping attacks. Brent crude was trading at $100.30 per barrel at the time of writing, while West Texas Intermediate sat at $91.70, both up more than $10 from their Monday levels. Meanwhile, Kazakhstan has suspended oil exports via the Caspian Pipeline Consortium system following drone attacks by Ukraine.

Strategic chokepoints become flashpoints

The Houthis have intensified their campaign against commercial vessels in the Red Sea, targeting tankers attempting to pass through the Bab el-Mandeb Strait. These attacks, combined with the paralysis of the Strait of Hormuz—a narrow waterway through which roughly a fifth of the world’s oil passes—have created a bottleneck that traders say is difficult to handle. The situation has drawn sharp warnings from President Trump regarding Iran, a development commodity analysts warn could further spook an already jittery market.

“Further escalation in the Persian Gulf and fears of a widening conflict are putting a significant amount of oil supply at risk,” ING commodity analysts stated in a note. They pointed specifically to the Houthi strikes on Saudi tankers and the political rhetoric coming from Washington. The market is reacting to the lack of de-escalation, a factor that Warren Patterson and Ewa Manthey argue will keep prices moving upward. They suggest that pressure will eventually build on the Trump administration to return to the negotiating table, but only after the cost of higher energy prices becomes undeniable.

Inventory levels and domestic impact

Supply constraints are not limited to the Middle East. According to Eric Nutall of Ninepoint Partners, Middle East oil production remains 7 to 8 million barrels per day below pre-war levels. He notes that global onshore inventories are sitting at near record low seasonal levels, creating a tight environment that leaves little room for error. The U.S. Strategic Petroleum Reserve is also reported to be close to dangerously low levels, and OECD stockpiles have dropped significantly.

This tightening of supply is hitting consumers directly. AAA data shows U.S. gasoline prices have climbed back above $4 per gallon, a development that could accelerate political pressure on the administration to address the crisis ahead of the midterm elections in November. Voters have historically cited fuel costs as a top priority, and the current trajectory suggests those costs will remain a central issue for policymakers.