Brent crude briefly tops $110 as both key Mideast oil chokepoints face disruption

Crude oil prices posted their steepest weekly gains since July as escalating hostilities between the United States and Iran, combined with the Houthi seizure of a strategic Yemeni port, threatened to choke off two of the world's most critical energy chokepoints simultaneously.

Brent crude hit an intraday high of $110.19 per barrel on Friday morning in Asian trading before easing, while WTI touched $104.46 — both benchmarks trading more than 10% higher on the week. On Thursday, Brent settled at $107.63 after surging 6.3%, while WTI climbed 6.7% to $102.48, crossing the $100 mark for the first time since May.icis+2

Prices later pared gains Friday after the Financial Times Pearson plc ↗ 0.35% reported that Middle Eastern foreign ministers were attempting to negotiate a temporary deal with Iran to manage shipping through the Strait of Hormuz.globalbankingandfinance

Two Chokepoints Under Threat

The rally was driven by simultaneous disruptions across both of the Middle East's key oil transit routes. Iran said it attacked 10 ships near the Strait of Hormuz on September 9, following U.S. strikes on five Iranian oil tankers. The Islamic Revolutionary Guard Corps warned it would escalate its response to further attacks.aljazeera+1

On the same day, Iran-aligned Houthi forces seized control of Yemen's port of Mocha, tightening their grip on the Bab el-Mandeb Strait — the narrow waterway linking the Red Sea and the Gulf of Aden. The seizure is particularly damaging for Saudi Arabia, which had increasingly diverted crude exports through its Red Sea terminal at Yanbu after the Strait of Hormuz became contested. Houthi control of Mocha now threatens an estimated 4 to 5 million barrels per day of Saudi exports routed through that corridor.globalbankingandfinance+1

Saudi crude production fell to 6.238 million barrels per day in August, down 23% from July and its lowest level since 1990, according to OPEC data. Saudi crude exports dropped to roughly 3 million barrels per day, the lowest in nine years, according to data compiled by Bloomberg, Kpler, and Vortexa.icis+1

Broader Economic Fallout

The energy shock is rippling through global markets. U.S. diesel prices surpassed $6 a gallon for the first time, according to GasBuddy, while regular gasoline averaged $4.28 per gallon nationwide. The S&P 500 fell for a fourth straight session on Thursday, and the 10-year Treasury yield surged to 4.93%, its highest since October 2023.stylemagazine+1

Traders are now pricing in a nearly 70% probability that the Federal Reserve will raise interest rates at its meeting next week, up from 49% a week earlier, according to CME ↗ 1.50% FedWatch data. The European Central Bank raised its main rate by a quarter point to 2.5% on Thursday, citing persistent inflation pressures from the conflict.aljazeera+1

The U.S. Energy Information Administration raised its 2026 Brent forecast to $91.01 per barrel from $86.81, estimating that global oil inventories have fallen by about 400 million barrels so far this year. S&P Global ↗ 0.49% Energy said Thursday it no longer expects Middle East oil production to return to pre-war levels by the end of 2027.hurriyetdailynews+1

What Comes Next

Analysts warned that further escalation could push prices sharply higher. "With events spiralling and Iran showing it is willing to stretch this conflict as wide and as long as it can, it is becoming increasingly likely that WTI crude will retest the $119.48 high from early March," IG analyst Tony Sycamore said. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.44% said the probability of Brent breaking past $120 is rising.atalayar+1

The durability of the rally may ultimately hinge on China, the world's largest crude importer. Independent Chinese refiners have increased purchases of crude from West Africa, Canada, and South America as Middle East supply has grown scarce, supporting prices globally. "For months, the bearish case rested on soft Chinese demand," said David Jorbenaze, global oil market lead at ICIS. That assumption is now being tested.icis+1