Crude oil is entering a more volatile phase as geopolitical tensions and infrastructure disruptions tighten the outlook for global energy supplies. Oil traded near $102 a barrel Monday after briefly reaching $105, a four-month high, as investors assessed growing risks around the Strait of Hormuz and disruptions to Saudi Arabia’s energy infrastructure.

Why Is Oil Approaching $102?

Crude oil rose to $101.92 a barrel on September 14, gaining 1.87% from the previous session. The move represents a 20.62% increase over the past month and a substantial 61.01% gain compared with the same period last year.

The latest advance reflects more than conventional supply-and-demand dynamics. Saudi Arabia closed its critical East-West pipeline after drones launched from Iraq damaged the infrastructure last Thursday. The pipeline normally provides an alternative route for moving Saudi crude without relying entirely on the Strait of Hormuz, making its closure particularly significant as regional shipping risks intensify.

Could Hormuz Become the Market’s Biggest Risk?

The Strait of Hormuz remains central to the global oil market, and recent shipping activity suggests that traders are becoming increasingly cautious. The number of commodity vessels observed passing through the strait fell to single digits over the weekend, signaling a potentially significant deterioration in the movement of energy supplies.

The pipeline disruption also coincided with the postponement of a diplomatic meeting between Iran and Gulf Arab states that was expected to address the situation surrounding Hormuz. With diplomatic efforts interrupted and physical infrastructure coming under attack, the market is increasingly pricing the possibility that supply constraints could persist.

Russia-Ukraine Diplomacy Adds Another Layer

Energy-market uncertainty is also being influenced by developments between Russia and Ukraine. Ukrainian President Volodymyr Zelenskyy said Ukraine would be prepared to halt attacks on Russian energy targets if Moscow agreed to do the same. However, he questioned whether Russia would honor such an arrangement.

The statement contradicted U.S. President Donald Trump’s assertion that Russia and Ukraine had agreed to suspend attacks against each other’s energy infrastructure. The conflicting positions create additional uncertainty for energy traders, particularly because attacks on production, processing and transportation infrastructure can rapidly affect regional supply expectations.

What Could $100 Oil Mean for Markets?

A sustained oil price above $100 could become a significant macroeconomic risk. Higher energy costs can feed into transportation, manufacturing and consumer prices, complicating efforts by central banks to contain inflation. The risk becomes more pronounced if supply disruptions persist rather than representing a temporary geopolitical premium.

For investors, the next stage of the oil rally will depend heavily on whether shipping through Hormuz normalizes, Saudi Arabia restores the affected pipeline and diplomatic efforts resume. If those developments fail to materialize, crude could remain elevated and potentially create another wave of inflationary pressure across global markets.