The Commodities Feed: Brent tops $100/bbl as Middle East tensions build
Lead — The recent surge in Brent crude oil above $100 per barrel underscores escalating tensions in the Middle East, particularly following attacks on Saudi maritime assets. Per the full note from ing-think, this price movement is driven by fears of supply disruptions, with significant risks to the energy infrastructure in the region. Market expectations are that this trend could push prices higher if de-escalation efforts fail. As tensions escalate, traders should watch closely for the potential impact on associated currencies and broader market sentiment in energy-sensitive economies.
What the desk is arguing
The desk frames this as a critical moment for oil prices, driven notably by the conflict's potential to disrupt key supply routes. Per the commentary, the market is reacting to the possibility of further escalations, particularly in response to recent Houthi attacks on Saudi vessels that can affect oil flows in the region.
Crude prices have responded markedly, with Brent rising above $100 per barrel for the first time since May, suggesting a significant bullish momentum that analysts expect to continue if the geopolitical situation deteriorates further. The scale of market anxiety hinges on historical trends, where pressure for the Trump administration to negotiate has tended to intensify as prices near $120 per barrel.
Where it sits in our coverage
Currently, there is no internal coverage data on the relevant currencies, so we will not elaborate on specific firm targets or consensus within our framework.
How other firms see it
Without our internal coverage targeting Brent-related currency pairs, we are unable to align or contrast with other firms' positions at this time. However, the narrative around oil price volatility remains a crucial thematic driver across markets.
What the calendar says
No scheduled events could drastically shift the oil price landscape or influence trader sentiment in the immediate future.
Key takeaways
- 01Brent crude oil has surpassed $100/bbl due to heightened geopolitical tensions in the Middle East.
- 02Continued attacks on Saudi assets are placing oil supply at risk, amplifying market fears.
- 03Historically, oil prices nearing $120/bbl could prompt increased calls for U.S. negotiations with Iran.
- 04The absence of de-escalation indicates a forecasted continuation of rising oil prices.
Market implications
Traders should monitor the $120 per barrel level for potential psychological barriers and shifts in U.S. foreign policy rhetoric. Additionally, the volatility in oil prices could influence regional currencies; thus, positions in oil-sensitive currencies like the CAD should be closely observed.
Risks to this view
Should the geopolitical situation stabilize or negotiations towards de-escalation materialize, it could lead to a rapid decline in oil prices, undermining the current bullish sentiment and causing significant reversals in trading positions.
Articles The Commodities Feed: Brent tops $100/bbl as Middle East tensions build Published 02:49 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Oil prices continued to rally, breaking above $100/bbl, as the conflict in the Middle East threatens to widen, putting additional supplies at risk Warren Patterson and Ewa Manthey Energy - Oil to move higher in absence of de-escalation Oil prices surged yesterday, with ICE Brent breaking above $100/bbl for the first time since May. Further escalation in the Persian Gulf and fears of a widening conflict are putting a significant amount of oil supply at risk. Houthi attacks on Saudi vessels in the Red Sea have the potential to widen this conflict, leading to further escalation.
President Trump said he will hold Iran responsible for attacks on vessels in the Red Sea, while suggesting a ratcheting up of attacks against Iran. Market fears will be centred around the risk of energy infrastructure in the region being targeted once again. With little-to-no sign of de-escalation, the market is likely to take the path of least resistance for now.
This suggests oil prices will only continue to move higher. The key question is at what price level pressure begins to build on the Trump administration to return to the negotiating table. If Trump’s previous spikes during the early stages of the war are any guide, pressure to de-escalate will likely grow significantly if, and when, Brent nears $120/bbl.
For Iran, it’s less about where oil prices are trading (in fact, Iran will want to push prices as high as possible) and more about how long they can endure a collapse in oil revenues amid the US blockade. The potential supply disruptions facing the market now are larger than at any time during the war. Not only have oil flows through the Strait of Hormuz essentially dried up, but there are clear risks to Saudi oil flows from the Red Sea.
In June, Saudi crude oil exports from Yanbu in the Red Sea averaged roughly 4.6m b/d. In addition, we’re seeing disruptions to Kazakh oil flows from the CPC terminal in Russia, amid alleged Ukrainian attacks on tankers. Export volumes from this terminal in recent months have exceeded 1.7m b/d.
There are reports that the Russian government is considering an extension to its export ban on diesel by another month. The ban is set to expire at the end of July. However, continued Ukrainian attacks on Russian refinery infrastructure have tightened the domestic refined products market.
Russia is the second-largest exporter of diesel globally, with seaborne exports in excess of 700k b/d in 2025. An extension to the ban will likely continue to provide support to middle distillate cracks, particularly if there’s no let-up in Middle East tensions. The latest data from Insights Global highlights the growing tightness in the middle distillate market.
Gasoil inventories in the ARA region fell by 44kt week-on-week to 1.64mt, 13% below the 5-year average and the lowest levels since 2022. Jet fuel inventories also continued to tighten in the region, falling 64kt WoW to just 514kt- 42% below the 5-year average. Metals - Gold pressured as oil rally fans inflation fears Gold fell as escalating tensions in the Middle East pushed energy prices higher, raising concerns that inflation could remain elevated and keep monetary policy restrictive for longer.
Despite ongoing geopolitical risks, gold has struggled to attract meaningful safe-haven demand since the conflict began. Instead, markets have focused on the inflationary implications of higher oil prices and the prospect of higher-for-longer interest rates. Brent crude climbed back above $100/bbl, lifting Treasury yields and the US dollar and weighing on non-yielding assets like gold.
Recent strength in bullion appears driven largely by dip-buying and short covering. This follows the sharp correction from record highs earlier this year. The rebound has since lost momentum.
Gold is hovering around the key $4,000/oz support level. However, elevated oil prices and rising yields are likely to cap any recovery, leaving $4,000/oz as the key near-term level to watch. WTI Russia-Ukraine Precious metals Persian Gulf Middle East war Middle distillates Jet fuel Iran conflict Gold Geopolitics Gasoil Diesel Brent Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Warren Patterson Head of Commodities Strategy Warren Patterson is Head of Commodities strategy based in Singapore. He joined the bank in April 2016 and covers the entire commodities complex.
Previously, he worked at a commodities trade house… Ewa Manthey Commodities Strategist Ewa Manthey is a Commodities Strategist based in London. She joined the bank in September 2022 and covers the entire commodities complex, with a particular focus on the metals markets. She has… In this article Energy - Oil to move higher in absence of de-escalation Metals - Gold pressured as oil rally fans inflation fears
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