Oil prices rise to $100 as IEA calls war on Iran ‘biggest supply disruption’ in history

Twenty-four hours after the International Energy Agency (IEA) announced the release of 400 million barrels from the Group of Seven’s oil storage, oil prices rose to the mid-$90s per barrel again.

The Iran war is now “causing the largest supply disruption in the history of the world oil market,” the IEA said in a report on Thursday, noting that 7.5% of global supply is now disrupted.

Futures on Brent crude (BZ=F), the international benchmark, gained more than 6% to trade around $6.10 in morning trade after briefly crossing $100 a barrel overnight. US benchmark West Texas Intermediate (WTI) crude (CL=F) took nearly 10% to change hands above $95.60.

Several tankers and other vessels were hit in and around the Strait of Hormuz on Wednesday and Thursday, bringing the number of ships attacked since the start of the war to at least 16. Iran has targeted ports and other critical infrastructure across the region, as explosions at its oil storage facilities have blanketed Tehran in dark clouds of oil-laden air.

Flows in the Strait, which on a typical day sees an estimated 20 million barrels per day (bpd) of petroleum products enter its waters, remain at zero, with nothing but a few Iranian-linked vessels plying the area.

Across the Gulf, shutdowns of well sites and force majeure declarations on refineries and other infrastructure continue to mount. Gulf states have now cut 10 million bpd of production volume, and the war has shut down more than 3 million bpd of refining capacity, according to the IEA.

In his first public remarks since the death of his father Ali Khamenei, Iran’s newly appointed leader Mojtaba Khamenei said the Strait of Hormuz will remain closed, Iran will continue to attack the entire Gulf region, and that the regime will open “other sides” if the war continues, according to Bloomberg. Khamenei did not speak publicly, and instead a written statement was read by an anchor on state TV.

On Wednesday, Iran’s Revolutionary Guard Corps said it would not allow “a liter of oil” to cross the Strait.

“You will not be able to lower the price of oil automatically. Expect oil at $200 per barrel,” the spokesman said in a public statement. “The price of oil depends on the security of the region, and you are the biggest source of insecurity in the region.”

Those developments are reflected in the rapidly moving price sense from Wall Street.

Given the ongoing market turmoil, Goldman Sachs’ commodity desk raised its prices on Wednesday night for the third time since the start of the war in Iran. The bank now estimates fourth-quarter Brent and WTI prices at $76/barrel and $72/barrel, respectively, assuming a 30-day disruption, with prices at $93/barrel and $89/barrel under a 60-day disruption.

A day earlier, Goldman forecast Brent and WTI prices of $71/barrel and $67/barrel, respectively, in the fourth quarter. At the beginning of the week, those price targets were $66/barrel and $62/barrel, respectively.

In a recent client letter, Macquarie’s global strategist Vikas Dwivedi wrote that “a few weeks of the closure of Hormuz will create a domino effect of events that may reach $ 150 or more.” Bloomberg economists recently noted that a three-month closure of the Strait of Hormuz could push prices up to $160 per barrel.

The U.S. Department of Energy said Wednesday night that the U.S. will draw 172 million barrels from its strategic storage facility over a four-month period. Using rough calculations, the figure breaks down to about 1.4 million bpd, well below the 15 million bpd or so of global flows disrupted by the Iran war.

Commenting on Truth Social Thursday morning, President Trump said rising oil prices are less of a concern to him than dealing with the Iranian regime.

“The United States is the largest oil producer in the world, by far, so when oil prices go up, we make a lot of money,” the president wrote. “BUT, what is of greatest interest and priority to me, as President, is to prevent the evil Empire, Iran, from acquiring Nuclear Weapons, and destroying the Middle East and, indeed, the World.”

US gas pump prices are now averaging $3.598 a gallon nationally, up from $2.944 a gallon last month, according to AAA data — just nine months before the midterm elections.

Jake Conley is a news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.