Rising tensions in the Middle East are creating fresh concerns for the global oil market. Analysts warn that the latest escalation in the conflict could push oil prices much higher if supply disruptions continue. Oil has remained surprisingly stable during months of fighting, but experts say that resilience is now being tested.

Oil prices climbed above US$100 per barrel for the first time since May. Gasoline prices have also increased, while diesel costs continue to rise. Analysts say the market is becoming more concerned about inflation as energy prices move higher.

Earlier in the conflict, producers found ways to keep oil flowing despite disruptions. Companies rerouted shipments and relied on alternative transport routes. However, many of those workarounds are now under pressure. Attacks on shipping near the Strait of Hormuz have reduced crude traffic through one of the world’s most important oil routes. At the same time, the Houthi blockade near the Bab al-Mandeb Strait has limited another key export path.

Shipping companies also face growing challenges. Reports say insurers may refuse to cover vessels that pay tolls demanded by Iran, as doing so could violate U.S. sanctions. Without insurance, many ships may avoid the route altogether, increasing pressure on global oil supplies.

The conflict has also expanded beyond the Middle East. Ukrainian drone attacks on Russian energy facilities have disrupted fuel production and exports. Russia has responded by banning diesel exports, removing a significant amount of fuel from the global market. These developments have added to concerns about tightening supplies.

Global oil inventories have also fallen sharply over the past five months. The United States has reduced its Strategic Petroleum Reserve, while commercial oil stocks are approaching lower operating levels. Analysts say smaller reserves leave less room to respond if supplies fall further.

Meanwhile, China’s oil stockpiles have helped reduce demand for imports. However, experts believe those reserves could last only a few more months. Once China returns to the market, global demand could rise again.

Analysts say oil prices could continue climbing if current conditions persist. Some expect crude to exceed US$120 per barrel later this year. Others warn that a wider regional conflict could send prices above US$150 per barrel, setting a new record.