Oil market prepares for $100 a barrel as Middle East producers cut output

Oil prices are on the brink of crossing the $100-a-barrel threshold for the first time in almost four years, as the Middle East’s largest producers start to curtail output with their barrels trapped in the Gulf by the US and Israel’s war with Iran. Traders warned that the oil sector was facing one of its greatest ever challenges, with Iran’s attacks on tankers in the Strait of Hormuz affecting production in countries responsible for about a quarter of global crude supply. Saudi Arabia, the UAE, Iraq and Kuwait are all either throttling back output or shutting fields entirely, as they risk maxing out storage tanks as crude backs up in the Gulf. Iran’s production had been depressed by years of US sanctions before the war, and its exports have also fallen sharply in the past week. Further attacks on oilfields and energy infrastructure over the weekend also pose a new threat that could cause prices to soar, just four years after Russia’s full-scale invasion of Ukraine triggered the last energy crisis. Last week US oil benchmark West Texas Intermediate posted its biggest weekly rise on record, surging 36 per cent to $90.90 a barrel, while international marker Brent crude hit $92.69. Both Brent and WTI were trading around $60 a barrel in early January. Gains accelerated towards the end of last week, with Brent rising 8.5 per cent on Friday, and traders increasingly betting on a prolonged shutdown of the Strait of Hormuz a chokepoint that normally accounts for at least a fifth of global oil and liquefied natural gas supplies. “Unless the situation improves quickly I expect we’ll reach triple-digit Brent prices early next week,” said Richard Bronze, head of geopolitics at consultancy Energy Aspects. [https://www.ft.com/content/56a01aa5-98af-48f0-b580-89e7bb4f59f6](https://www.ft.com/content/56a01aa5-98af-48f0-b580-89e7bb4f59f6)