UK oil prices climbed to $95 a barrel on Monday, pushed higher by rising tensions between the US and Iran and renewed threats from Houthi rebels in Yemen. The move extends a weeks-long rally that has brought crude close to levels not seen in over a year.
Why prices are rising
The latest jump comes after the US deployed additional naval assets to the Persian Gulf and Houthi forces warned they would target shipping lanes near the Bab el-Mandeb strait. Traders are pricing in the risk of supply disruptions from the Middle East, a region that accounts for roughly a third of global oil output. Iran, a major OPEC producer, has also been at the center of diplomatic friction, with no breakthrough in nuclear talks.
What the prediction market says
On the decentralized forecasting platform Polymarket, traders currently see a 16% probability that crude oil will hit a new all-time high by December 31. That’s a notable shift from just a few weeks ago, when the odds were in the single digits. While $95 is still well below the record of $147 set in 2008, the rapid climb has caught the attention of analysts and policymakers alike.
The rally has been fueled by a combination of supply fears and actual production cuts. OPEC+ has kept a lid on output, and Saudi Arabia recently extended its voluntary cut of 1 million barrels per day through the end of the year. At the same time, global demand has held up better than expected, particularly in China and the US.
For UK motorists, the rise in crude prices is already showing up at the pump. Petrol prices have edged higher in recent weeks, and further increases could follow if Brent crude stays above $95. The UK government has so far resisted calls to cut fuel duty, arguing that revenues are needed to fund public services.
The 16% probability of a new all-time high by year-end reflects both the bullish momentum and the many unknowns. A diplomatic breakthrough with Iran could add millions of barrels to the market, while a sharp economic slowdown would curb demand. For now, the market is betting on more volatility ahead.
