Oil prices moved closer to $100 a barrel on Monday as continued threats to shipping through the Strait of Hormuz combined with renewed Chinese crude buying to tighten the outlook for global supplies, according to a report by Bloomberg.
Brent crude briefly climbed above $98 a barrel before paring gains during a relatively quiet trading session, with US markets closed for the Labor Day holiday. The latest advance comes as uncertainty surrounding the Middle East conflict continues to raise the prospect of disruptions to one of the world’s most important oil transit routes.
Iran said a deal with Oman to oversee shipping through the Strait of Hormuz could be reached within days, although the prospect of an agreement remains complicated by heightened tensions with Washington. Tehran has also warned vessels of potential attacks in waters near the Omani coast following the US strike on Iranian vessels over the weekend.
Supply concerns were compounded by reports of a fresh attack on Saudi Aramco facilities in Jazan. The incident follows a series of strikes in the region that have already contributed to the closure of a major refinery.
For hedge funds and other commodity investors, the supply risks are being reinforced by a revival in Chinese demand. Beijing has returned to the crude market after a period of relatively subdued buying, pushing up prices for cargoes from producers as far afield as West Africa and Canada.
The shift is significant because China’s earlier pullback in purchases had helped contain oil prices during the initial stages of the conflict. With Chinese demand now recovering at the same time as inventories are declining, the market is facing a more supportive fundamental backdrop.
Brent is now approaching $100 a barrel for the third time this year and has gained roughly 60% in 2026. Refined products, including diesel, have risen even more sharply as the Middle East conflict has persisted alongside separate supply pressures linked to the Russia-Ukraine war.
The combination of geopolitical risk, tightening inventories and stronger Chinese demand is likely to be a major focus for traders attending the Asia-Pacific Petroleum Conference in Singapore this week.
Hedge funds have already responded by increasing their exposure to oil. Their net-bullish positioning in Brent reached its highest level since May in the week to September 1, while net-long positions in US crude rose to their strongest level since June.
The latest positioning data suggests money managers are increasingly pricing in the possibility that the conflict could generate a more prolonged supply shock.
Goldman Sachs commodities strategists have warned that Brent could reach $120 a barrel in a more severe scenario, particularly if attacks on commercial shipping expand or intensify.
