West Texas Intermediate (WTI), the US crude oil benchmark, surged more than 7%, breaking above the $100-per-barrel mark for the first time since May 2026, and was trading at $103.86 after rebounding from lows of $95.37 [1]. This sharp rise was primarily driven by escalating geopolitical risks in the Middle East, with intensified attacks and threats to key shipping lanes. Yemen’s Houthis, linked to Iran, claimed they are close to controlling the Bab al-Mandab Strait, which has squeezed Red Sea traffic and increased pressure on Saudi Arabia [1].
Additionally, traffic through the Strait of Hormuz remains restricted. US officials, as cited by the Wall Street Journal, reported that Iran has increased its ballistic missile production and allegedly attacked 10 ships near the Strait on Wednesday, following US strikes on five Iranian tankers [1]. US President Donald Trump stated that the US may attack Pickaxe Mountain near Iran’s Natanz uranium enrichment facility, suggesting that the conflict could persist beyond November’s mid-term elections [1].
On the demand side, China has ramped up crude oil purchases in recent weeks, reclaiming its position as the world’s largest crude importer, according to ING. The analyst noted that if Chinese buying continues to recover, it could amplify the effects of supply disruptions and keep crude prices elevated [1]. Meanwhile, US crude oil inventories fell by 391,000 barrels to 424.1 million barrels last week, with the EIA noting continued strength in refining activity [1].
The combination of heightened supply risks due to Middle East tensions and renewed Chinese demand has created a bullish environment for oil prices, with analysts warning that ongoing disruptions and strong buying could sustain higher prices [1].
CONCLUSION
WTI's surge above $100 reflects a potent mix of geopolitical supply threats and strengthening demand from China. With ongoing tensions in key Middle Eastern shipping lanes and falling US inventories, the oil market faces significant upward price pressure. Analysts suggest that unless these factors ease, elevated crude prices may persist.