Author: Prince Agyapong, Energy & Extractives Journalist, and Africa Extractives Media Fellow

Oil prices have crossed a psychological threshold that traders have been watching for months. Brent crude settled above $100 per barrel for the first time since May, closing at $100.69 per barrel, while West Texas Intermediate (WTI) climbed to $92.19 per barrel.

The rally is not simply another short-term reaction to geopolitical headlines. It reflects a market increasingly convinced that supply risks are becoming more than just a possibility.

At the centre of the latest surge is the growing conflict across the Middle East. Attacks on Saudi-flagged tankers in the Red Sea, coupled with threats to disrupt both the Red Sea and Strait of Hormuz shipping lanes, have injected a level of uncertainty that commodity markets rarely ignore.

Energy traders understand a simple truth: when major oil transport corridors come under threat, prices respond immediately.

Shipping Routes Are Driving the Market

The Red Sea and the Strait of Hormuz are among the world’s most strategic oil transit routes. Recent attacks have already altered shipping patterns.

Bab al-Mandab crude flows averaged 2.6 million barrels per day during the first 20 days of July, less than half June’s average of 5.5 million barrels per day.

Although vessel movements through Hormuz recovered slightly during the week, the composition of those shipments reveals continued caution, with a significant share linked to Iranian trade.

The disruption extends beyond the Middle East. Kazakhstan’s crude exports have also been affected after the Caspian Pipeline Consortium (CPC) suspended Black Sea loadings following tanker attacks.

With roughly 80% of Kazakhstan’s crude exports moving through that route, global supply concerns have intensified further.

Refining Markets Signal Tight Supply

The strength in crude prices is being reinforced by activity across refined petroleum products.

Gasoline margins remain elevated as Middle East supply uncertainty combines with healthy US blending demand. Gasoil and ultra-low sulphur diesel markets have also strengthened, supported by tighter regional availability and higher refinery demand.

Perhaps the clearest signal comes from the futures market.

Brent’s six-month backwardation has widened to its strongest level since May, indicating buyers are paying a premium for immediate supplies rather than future deliveries. That pricing structure is rarely seen when markets believe supply is comfortable.

Naphtha has also posted one of the strongest gains in recent months, while fuel oil markets continue to tighten as traders question how quickly disrupted supply chains can recover.

What This Means for Global Energy Markets

Higher oil prices rarely remain confined to trading screens.

Sustained crude prices above $100 per barrel could feed into higher fuel costs, transportation expenses and inflation, particularly for oil-importing economies.

Countries heavily dependent on imported petroleum products may also face increased pressure on foreign exchange reserves and energy budgets.

For producing nations, however, stronger prices create an opportunity to improve export earnings and fiscal revenues. The challenge will be balancing those gains against heightened geopolitical uncertainty and market volatility.

The market’s attention will remain fixed on developments in the Middle East. Any further disruption to shipping routes or production infrastructure could tighten supplies even more. On the other hand, signs of de-escalation could quickly cool the current rally.

For now, traders are pricing risk as aggressively as they are pricing oil.

Bottom Line

The latest rally in oil prices is being driven by more than speculation. It reflects genuine concerns about supply security at a time when key shipping lanes are under pressure and physical crude markets are already tightening.

Brent’s return above $100 per barrel is a reminder that geopolitics remains one of the most powerful forces shaping global energy markets.

Whether this becomes a prolonged bull run or another short-lived spike will depend less on economic data and more on events unfolding in one of the world’s most important oil-producing regions.