War is entering a dangerous stage, and oil prices may break the $146 all-time historical high in 2008.

Brent crude oil is rapidly approaching the $100 per barrel mark, as a sharp deterioration in the situation in the Middle East is pushing global energy markets to the most dangerous edge in decades.

On Thursday, Brent crude futures rose nearly 5% in a single day, reaching $100 per barrel during trading. Earlier, the Houthi armed forces entered the conflict, threatening to blockade the key maritime chokepoint of the Strait of Hormuz; at this time, the Strait of Hormuz is still partially disrupted. With two major chokepoints facing simultaneous pressure, the market risk premium is surging sharply.

Helima Croft, global commodities strategy head at RBC Capital Markets, warned that “the war is entering a dangerous phase, with the Red Sea and key infrastructure at risk,” and said there is a possibility that oil prices could break above the $128-per-barrel peak set during the 2022 Russia-Ukraine conflict, or even challenge the 2008 historical high of $146 per barrel.

This surge in oil prices is happening against the backdrop of sharply depleted global oil buffer inventories. According to reports, Cushing crude oil inventories have approached “tank-bottom” levels, leaving the market with almost no capacity to absorb the persistence of supply shocks. Meanwhile, the national average price of regular gasoline in the United States already broke above $4 per gallon on Monday, further increasing political pressure on the Trump administration as it pushes for Gulf diplomacy and mediation.

Dual chokepoints under simultaneous pressure, supply risks suddenly escalate

The direct trigger for this round of sharp oil price increases is the Houthi armed forces’ renewed attacks on Red Sea shipping.

According to Xinhua News Agency, in the early hours of the 23rd local time, Yemen’s Houthi armed forces said they attacked two Saudi oil tankers in the Red Sea and claimed the two tankers violated the maritime blockade order recently announced by the group. After the news broke, Brent crude jumped to above $95 in after-hours trading.

Entering Thursday, as the war-risk premium continued to accumulate, oil prices rose further to $98.70.

At present, the tankers have again bypassed the Southern Red Sea route. After the 2023 Houthi attack incidents temporarily subsided, shipping traffic had briefly resumed, but now faces another reversal. At the same time, the partial blockade situation in the Strait of Hormuz has not been lifted. With two of the world’s most important energy transportation corridors thrown into turmoil at once, market expectations for supply are tightening sharply.

Saudi Arabia has sent a tough signal, saying it will respond forcefully to any attacks targeting its oil tankers or onshore energy facilities, further heightening the risk that the situation will escalate.

RBC: In the worst case, oil prices could break the 2008 historical extreme

In a report sent to clients on Thursday, Helima Croft used unusually strong wording. She noted that although Brent crude has gained more than 30% cumulatively since July 1, current prices are still a “lagging indicator of extreme stress in the region.”

Croft said that given the dangerous escalation currently taking place, oil prices have potential to break above the $128-per-barrel high recorded during the 2022 Russia-Ukraine conflict. In the worst case of a full-scale regional war, they could even challenge the 2008 historical peak of $146 per barrel.

She specifically pointed to the far-reaching impact of the Houthi armed forces’ involvement: the Houthi entry into the conflict could further expand supply losses caused by the war by weakening the effectiveness of alternative routes that replace East-West pipeline routes.

Saudi Arabia previously relied on an East-West pipeline with daily transport capacity of 7 million barrels to move some crude oil, bypassing the Strait of Hormuz, to the Red Sea export end. However, once the Strait of Mandeb is also unable to pass, this alternative route would lose its significance; tankers bound for Asia would be forced to sail around the Cape of Good Hope. That would not only sharply raise freight costs but also delay deliveries by several weeks, further tightening physical market supply.

Goldman Sachs also issued a warning, with $120 potentially becoming a Q4 scenario

RBC is not the only institution issuing warnings.

According to reports, Daan Struyven, a commodities expert at Goldman Sachs, warned on Monday that if disruptions to shipping through the Strait of Hormuz persist, Brent crude futures could surge to above $120 per barrel in the fourth quarter. He also pointed out that this is not a base-case forecast scenario.

The remarks from the two institutions together sketch the risk map of the current market: the base case is already severe, while tail risks are even more extreme.

Inventory tightness plus political pressure, narrowing the space for Trump’s diplomatic mediation

What worries the market more is that this supply shock is occurring when the global oil security buffer has already been substantially thinned. Cushing crude inventories are reportedly close to “tank-bottom,” leaving the market with almost no excess buffer to absorb a prolonged supply disruption.

On the demand side, the national average price of regular gasoline in the United States broke above $4 per gallon on Monday. The rise in this politically sensitive indicator is increasing internal pressure on the Trump administration. Analysts believe that once the U.S. military completes a sufficiently large-scale strike against Iran’s missile and drone capabilities used to threaten commercial shipping, oil price pressure will push Washington to seek diplomatic solutions again.

From the perspective of supply scale, the risk is not to be underestimated. The Strait of Hormuz carries roughly one-fifth of global oil supply; meanwhile, under normal conditions, the amount of oil passing through the Strait of Mandeb each day is 8 million to 9 million barrels. If both major corridors were to enter a simultaneous shutdown, global energy markets would face an unprecedented supply pressure test.