Brent crude tops $100 for first time since July as Iran war escalates

Brent crude has risen above $100 a barrel for the first time since July, as the escalating war between the US and Iran raises fears of disruption to global supplies.

The international benchmark gained more than 3% to above $101 after another exchange of fire in the Gulf.

The US military said it had destroyed multiple Iranian tankers after Tehran attempted to strike a US navy ship with ballistic missiles. The previous night, Iran-backed Houthis attacked four cities in Saudi Arabia, wounding more than 70 people and setting oil installations ablaze.

Gas prices climb across Europe

The benchmark Dutch gas contract rose by almost 4% to €78.73 a megawatt hour on Wednesday, its highest level since January 2023. The British contract increased by 7.77p to 196.57p a therm, its highest since December 2022.

Bank of England governor Andrew Bailey told MPs that higher oil prices were adding to pressure on inflation and interest rates. He said the risks were “on the upside” because of energy prices.

UK pump prices reach four-year high

Oil has risen by a quarter since early August. Average UK petrol prices reached 166.2p a litre on Tuesday, while diesel averaged 187.7p, according to motoring organisation the AA.

Petrol is up 4.4p a litre since the August bank holiday and diesel has risen by 4.1p. Ofgem’s energy price cap will increase by 4% in October; Andrew Goodwin, chief UK economist at Oxford Economics, predicted it could rise by a further 13% in January.

Shares in BP, Shell and Centrica, the owner of British Gas, rose by at least 1% on Wednesday morning. The FTSE 100 was down 0.5% overall.

Chinese imports remain a key indicator

Brent is up more than 60% this year and has moved above $100 three times in 2026. China, the world’s largest crude importer, has increased purchases in recent days.

Giovanni Staunovo, a commodity analyst at UBS Global Wealth Management, said Chinese imports recovered to nearly 9m barrels a day in August, from 7.15m in June, but remained below the pre-conflict February level of 12.6m barrels a day.

Oil prices have fluctuated during the six months since Tehran blocked the Strait of Hormuz. After the first US-Israeli attacks on Iran in late February, prices passed $100 and peaked at $126 in April before falling amid hopes of a ceasefire. They began rising again after a memorandum of understanding between the US and Iran collapsed and hostilities resumed.