Global oil markets hit a fresh milestone Tuesday as Brent crude briefly crossed $100 per barrel for the first time in roughly three months, reaching about $100.03. The move came after Houthi forces attacked Saudi energy infrastructure in the southern Jazan area, where Saudi Aramco operates a refinery capable of processing approximately 400,000 barrels per day.
The escalation coincided with a new round of U.S. pressure on Iran. The Trump administration sanctioned 27 Iranian airlines under Operation Economic Outcast, covering every Iranian airline not already sanctioned. Treasury Secretary Scott Bessent warned that anyone still doing business with those carriers risks being cut off from the global financial system. The sanctions follow earlier actions against banks in the UAE and Turkey as Washington tries to squeeze Iran out of global finance.
The supply picture is already strained. Middle Eastern crude shipments are running near 11 million barrels per day, down from about 18 million barrels per day before the U.S.-Iran conflict began, a reduction of roughly 7 million barrels daily. Rising non-OPEC production from the U.S., Canada and Guyana, plus China's large inventories and weaker demand, had cushioned the shock, but that balance is becoming harder to maintain.
Goldman Sachs has raised its oil forecasts and says Brent could exceed $120 a barrel if average Gulf production in 2027 remains 4 million barrels per day below pre-war levels. The bank still expects a smaller supply deficit and sees Brent around $80 on average in 2027, but the probability of Brent trading above $100 in March 2027 has climbed to roughly 25% from about 6% a month ago. OPEC+ offered no immediate additional relief, with seven producers agreeing to keep October required production at September levels and the next review set for Oct. 4.
Beyond crude, diesel markets are flashing stress. European diesel crack spreads recently exceeded $100 a barrel for the first time, while wholesale diesel prices climbed toward $200 a barrel. U.S. refinery utilization hit 98% in the latest week, and commercial crude inventories fell to about 424.5 million barrels. Energy equities rallied, with the iShares Global Energy ETF hitting its highest level since launching in November 2001 and the SPDR S&P Oil & Gas Exploration & Production ETF reaching its highest since June 2015.
