Brent Settles Above $100 as Traders Price a Short, Sharp Oil Shortage
Brent closed at $101.21 on Wednesday and neared $105 on Thursday as WTI crossed $100, yet five-year contracts near $70 show the market expects the squeeze to pass.
Brent crude settled at $101.21 a barrel on Wednesday 9 September, its highest close since late May, and extended its gains on Thursday. By Thursday morning in New York the international benchmark was trading at around $105, while West Texas Intermediate, the main US grade, pushed through $100 in early trading.
The rally has been swift. Brent was trading in the low $90s at the start of last week. It now stands roughly 20% above its level of a month ago and more than half as much again as it cost in September 2025, when a barrel sold for less than $70.
How prices got here
The $100 mark has been tested before this year. Brent closed fractionally above it on 23 July, at $100.69, before retreating. The last time it settled higher than Wednesday's level was 22 May, at $103.54. WTI's close of $96.05 on Wednesday edged past its early-June peak of $96.02.
What has shifted is the market's assessment of supply risk. Traders are pricing a greater chance of prolonged disruption to exports through the Strait of Hormuz after attacks on tankers and on Gulf energy facilities in recent days. Physical indicators point the same way: rates to charter crude tankers have climbed to record highs, US crude stocks edged down again in the week to 4 September, and the US Energy Information Administration estimates that global oil inventories have fallen by about 400 million barrels since January.
Emily Ashford, head of energy research at Standard Chartered, described prices as "gradually grinding higher, punctuated by sharp moves on headlines".
Why it matters
The shape of the futures curve says as much as the headline price. Barrels for prompt delivery are commanding a widening premium over later contracts, a pattern known as backwardation that signals buyers want oil now rather than later. Yet Brent for delivery five years out was trading at about $69.54, more than $30 below the front month. In plain terms, the market is paying up for a shortage it expects to be severe but temporary.
That gap shapes behaviour on both sides. Producers deciding whether to drill new wells look at longer-dated prices rather than this week's spike, so a jump to $100 does not automatically bring a wave of fresh supply. Consumers, by contrast, feel the front of the curve almost immediately, through fuel, freight and airfares.
The move is also landing on a difficult financial backdrop. The yield on the 10-year US Treasury has risen to around 4.84%, close to its highest since late 2023. Artem Bakushev, head of risk at Monaxa, argued that expensive energy squeezes company profits through transport, production and household budgets all at once, a combination that tends to weigh on shares.
- Brent: settled at $101.21 on 9 September, the highest close since 22 May.
- WTI: settled at $96.05 on Wednesday, then crossed $100 on Thursday.
- Month on month: Brent is up about 20% from roughly $87 in early August.
- Long-dated oil: five-year Brent near $69.54 points to a squeeze the market expects to ease.
- Stocks: global inventories are down by roughly 400 million barrels this year, according to the EIA.
Outlook
How long Brent holds above $100 depends less on demand than on whether tanker traffic through the Gulf stabilises. The benchmark's 100-day moving average sits near $91.55, a reminder of how far and how fast prices have run in a matter of days.
The next scheduled checkpoints are the weekly US inventory figures and the 4 October meeting of the core OPEC+ producers, who on 6 September chose to leave their output targets unchanged for October. Until then, the market's message is simple: oil available today is scarce, and buyers are prepared to pay for it.
Image: Walter Siegmund via Wikimedia Commons, CC BY 2.5