Brent crude oil hit $100 a barrel as experts warn interest rates could stay higher for longer

Oil hit $100 a barrel again this morning as fresh strikes in the Middle East ramped up concerns over fuel supply. Brent crude had been on the cusp of hitting the milestone on Tuesday evening, rising to $99.46 a barrel, its highest level since July 24. This morning, it hit $100 before slipping to $99.97. This week, attacks by the Iran-backed Houthis on Saudi energy facilities set oil installations ablaze and threaten an escalation of the cofnlict. Oil prices have risen more than 30 per cent since the US-Iran war started more than six months ago but the benchmark is well below the high above $126 a barrel reached in late April 2026. The conflict in the Middle East has disrupted oil flows through two vital arteries, the Strait of Hormuz and the Red Sea. The Strait of Hormuz, previously funnelling about 20 per cent of the world’s oil, now handles only a fraction of its normal traffic and shippers and vessels using the waterway face attacks. Higher oil prices could have major implications for households in Britain.Dan Coatsworth, head of markets at AJ Bell, said: 'This has major implications for personal finances, corporate profits and financial markets.' Troubled times: The conflict in the Middle East has disrupted oil flows through two vital arteries, the Strait of Hormuz, pictured, and the Red SeaCoatsworth said higher oil prices mean central banks, like the Bank of England in Britain, could keep interest rates higher for longer or consider further rate rises if inflationary pressures intensify. Having higher interest rates for longer will pile pressure on households grappling with mortgage rates, though spells better news for savers. Many major lenders have already upped their mortgage rates in recent days. Investment bank Goldman Sachs raised its Brent and WTI price forecasts by $5 to $85 and $80, respectively, for December 2026 and to $80 and $75, respectively, for 2027, reflecting its assumption that Middle East shipping disruptions will continue into 2027. 'Markets are increasingly pricing a prolonged conflict,' Goldman Sachs analysts wrote in a note today. HSBC also raised its 2026 Brent forecasts to $90 per barrel from $80 previously, including a $95 estimate for the fourth quarter of 2026. It lifted its 2027 forecast to $85 per barrel from $65.Global diesel supplies look set to remain tight due to a lack of spare refining capacity, Russia's ban on exports and the approach of peak winter demand, senior industry executives said. Operations at some energy facilities in Saudi Arabia, the world's top oil exporter, were halted today following attacks by Yemen's Iran-aligned Houthis that wounded 73 people, in what Saudi authorities called a dangerous escalation.Iran threatened the US with 'economic warfare' and said it had fired an advanced missile at US warships.And on Saturday, US forces struck three Iranian oil tankers, including one near Kharg Island, Iran's main oil export hub, according to US Central Command. The attacks followed strikes by Iran's Revolutionary Guards on US warships operating in the region.Coatsworth said: 'Oil price trends have played a key role in recent bond market troubles, with bond yields jumping in the face of renewed tensions between the US 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.'Oil prices and financial markets are closely linked – oil is a vital fuel for the global economy. 'Movements in oil prices can shape business and consumer confidence, influence spending decisions and contribute towards inflation, ultimately affecting corporate profits, economic growth and interest rates.'Coatsworth said that in the past 20 years, the global stock market, as measured by the FTSE All World index, fell in two of the four occasions when oil prices traded at $90 or higher for more than two months in a row. DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you