Oil prices climbed for a fourth straight session on Wednesday with rising more than $1 in early trade after fresh attacks across the Middle East deepened fears of supply disruptions.
Brent crude futures rose 1.4% to $99.33 a barrel while US West Texas Intermediate crude gained the same rate to reach $94.34 a barrel both nearing the closely watched $100 mark.
Brent prices have surged nearly 25% since early August as hopes for ending the six-month-old Middle East war faded and fighting intensified. Tensions escalated further this week after Iran-backed Houthi rebels in Yemen launched strikes on several Saudi cities also drawing another key US ally deeper into the conflict.
The latest flare-up followed US strikes on multiple Iranian oil tankers and an Iranian missile attack on a US base in Jordan.
Analysts at ING said recent developments suggest peace talks remain distant adding that markets are likely to keep pricing in a significant risk premium as uncertainty persists.
The renewed violence threatens to worsen existing disruptions to Middle East oil supplies already strained by attacks on energy infrastructure and key shipping routes, including the Strait of Hormuz.
While Saudi Arabia has rerouted some oil exports away from the strait as the analysts warned that continued attacks on the kingdom could complicate efforts to maintain steady crude flows to global markets.
OCBC analysts noted that Iran's strikes on Saudi energy facilities combined with the destruction of five Iranian tankers have raised fears of another prolonged disruption to global oil supplies.
With the conflict showing no signs of easing, markets are bracing for continued volatility as any further escalation could push oil prices past the $100 threshold and add pressure to global energy costs.
