Brent crude oil surpassed $100 a barrel on Monday, driven by renewed concerns over fuel supply disruptions stemming from escalating conflict in the Middle East. The benchmark reached $100 before settling slightly below, at $99.97.

Recent attacks by the Iran-backed Houthis on Saudi energy facilities have ignited fears of further escalation, impacting global oil flows. The conflict has disrupted traffic through vital waterways, including the Strait of Hormuz, which previously handled approximately 20% of the world's oil, and the Red Sea.

"This has major implications for personal finances, corporate profits and financial markets," said Dan Coatsworth, head of markets at AJ Bell. He warned that the surge in oil prices could lead central banks, such as the Bank of England, to maintain higher interest rates for longer or even implement further increases if inflationary pressures intensify. Higher interest rates could strain households managing mortgage payments, while potentially benefiting savers.

Investment bank Goldman Sachs has revised its price forecasts upward, now anticipating Brent crude to average $85 a barrel in December 2026 and $80 in 2027, reflecting the expectation that shipping disruptions in the Middle East will persist into 2027. "Markets are increasingly pricing a prolonged conflict," Goldman Sachs analysts stated in a recent note.

HSBC also raised its 2026 Brent forecast to $90 per barrel from $80, with an estimate of $95 for the fourth quarter of 2026, and increased its 2027 forecast to $85 from $65.

Global diesel supplies are also expected to remain constrained due to a shortage of spare refining capacity, export restrictions from Russia, and the approaching peak winter demand, according to industry executives.

Operations at some energy facilities in Saudi Arabia were temporarily halted following attacks by Yemen's Iran-aligned Houthis. These incidents, described by Saudi authorities as a "dangerous escalation," come amid broader regional tensions. Iran has threatened the U.S. with "economic warfare," and U.S. forces recently struck three Iranian oil tankers near Iran's main oil export hub.

Coatsworth noted the significant link between oil price trends and the bond market, where yields have risen due to renewed tensions between the U.S. and Iran. "The Middle East conflict has flared up again after a brief respite earlier in the summer, causing the market to worry about oil supplies and refining constraints," he said.

Historically, periods of elevated oil prices have correlated with stock market downturns. In the past two decades, the global stock market experienced declines on two of the four occasions when oil prices remained above $90 per barrel for more than two consecutive months.