Crude oil prices jumped more than 3% on Wednesday as fighting between the U.S. and Iran escalates in the Persian Gulf, raising investors' fears that energy exports through the Strait of Hormuz will fall.
Brent futures were up 3.4% at $101.25 a barrel by 11:12 a.m. ET. It is the first time the international benchmark has crossed $101 since July. U.S. West Texas Intermediate futures traded 3.6% higher to $96.38.
The U.S. military destroyed five Iranian crude oil tankers Tuesday in retaliation for attempted attacks on an American warship. The U.S. warship successfully evaded Iranian attack and no American personnel were harmed, U.S. Central Command said.
The escalation in the U.S.-Iran conflict, now in its seventh month, is raising the risk of oil prices surging above $120 a barrel as attacks on shipping intensify, said Daan Struyven, co-head of global commodities research at Goldman Sachs, in an interview on CNBC's "Squawk Box Asia."
Goldman's base case remains for Persian Gulf exports to gradually recover as producers adapt to disruptions, including through alternative shipping routes and eventually additional pipeline capacity.