Brent Crude Oil Breaks US$105 as Saudi Output Sinks to 1990 Low

Energy · Markets

Brent crude oil broke above US$105 a barrel on Thursday after the heaviest wave of tanker attacks since the Iran war began, while Saudi Arabia confirmed its deepest production cut in 36 years — a double shock that is now reaching Latin America’s markets, subsidies and currencies.

Tanker Attacks Push Brent Crude Oil Past US$105

Oil prices jumped about 4% on Thursday, with benchmark Brent crude oil hitting US$105 a barrel, after the biggest spike in attacks on Gulf shipping since the United States and Iran went to war in late February, Reuters reported from London.

The escalation came in two steps. On Tuesday, the US military said it destroyed five Iranian oil tankers — the Kivik, Charminar, Horizon 1 and Riesco in the Gulf of Oman, and the Derya near Kharg Island in the Strait of Hormuz — after Iran’s Revolutionary Guards targeted a US Navy warship with ballistic missiles twice in two days. The warship evaded the attacks and no American personnel were harmed, US Central Command said.

Iran answered on Wednesday, saying it had attacked 10 ships, including two US vessels and eight oil tankers — the biggest declared wave of attacks on shipping since the war began, according to the Associated Press. Iranian state media also said Tehran launched missiles toward US targets in Jordan; Jordan’s military said its air defenses intercepted 18 ballistic missiles, with no casualties reported.

The exchange shattered roughly a month of relative calm and put the Strait of Hormuz — the route for about a fifth of the world’s seaborne oil before the war — back at the center of the market. Analysts quoted by US media warned there is no military fix for the strait, and that each round of strikes makes escalation harder to control.

Saudi Output Falls to Lowest Since 1990

Hours later, a second shock landed — this time in data. Saudi Arabia informed OPEC’s secretariat that its crude production dropped by 1.9 million barrels per day in August to 6.238 million bpd, the lowest level since 1990, Bloomberg reported, citing the kingdom’s own submission.

The figure undercuts even the previous low reached in April, when output fell to 6.316 million bpd during the war’s first Hormuz blockade. Tanker-tracking data compiled by Bloomberg showed Saudi crude exports fell by roughly a third in August, to around 3 million bpd, supporting the reported production collapse.

Riyadh also told OPEC that its crude supply to market — including oil drawn from storage — reached 7.122 million bpd in August. The gap between supply and production suggests the kingdom is draining inventories to keep customers served. Secondary sources cited in OPEC’s report put Saudi output higher, at 7.276 million bpd, but still pointed to decline.

The ECB Makes the War a Rates Story

The oil shock is now moving monetary policy. On Thursday, the European Central Bank raised interest rates for the second time this year, lifting its policy rate to 2.50% from 2.25% to counter an energy-driven rise in inflation triggered by the Iran war, Reuters reported.

“The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,” the ECB said in its statement. The bank now sees euro-zone inflation at 3.0% this year, 2.5% next year and 2.1% in 2028 — an explicit admission that the war, not domestic demand, is driving the price outlook.

For Latin America, the signal matters twice: higher-for-longer rates in advanced economies tighten global financial conditions just as the region’s own central banks weigh how much of the oil spike to absorb.

What It Means for Latin America

The region sits on both sides of the shock. Brazil’s Petrobras and Argentina’s YPF gain cash flow with every dollar added to crude — YPF’s Vaca Muerta shale becomes more profitable at triple-digit oil — while fuel-importing consumers and finance ministries absorb the pain.

Brazil offered the clearest illustration this week. On September 9, the government allocated an additional 6.6 billion reais (about US$1.3 billion) for fuel subsidies, Reuters reported — the latest top-up to a subsidy architecture built since March that is now being stress-tested in real time as Brent crude oil runs far above the roughly US$90 assumption ministers used in April. In this morning’s wrap, WTI had settled at US$96.05 on Wednesday and Petrobras’s New York shares closed at US$20.93; both looked calm within hours.

Equity investors, meanwhile, are torn between buying Petrobras strength and selling Brazilian risk, and Brazilian stocks have swung between those two forces all week. Argentina’s YPF, which closed Wednesday at US$54.61 in New York, remains a direct proxy for how long Vaca Muerta economics stay supercharged.

Mexico is the mirror image: a major crude producer whose peso has still softened toward 17 per dollar, trading near 16.9 on Thursday (Yahoo Finance), as war-driven risk aversion outweighs the oil windfall. Fuel-price politics there, as in Brazil, grow more delicate with each week the strait stays dangerous.

What to Watch

Three questions now drive the market. First, whether the tanker war escalates further: Iran’s Revolutionary Guard Navy has warned crews near Kuwaiti and Bahraini ports to abandon their vessels, accusing both states of hosting US forces. Second, how long Saudi inventories can paper over a production shortfall of this size. Third, whether importers — from Brasília to Frankfurt — can keep cushioning consumers without reigniting the fiscal worries that already dog the region.

For readers in Latin America, the practical takeaway is that the war’s economic front has widened again: crude above US$105, the ECB tightening, and subsidy bills rising from Mexico City to Brasília. Currency note: conversions in this article use an implied rate of about 5.08 reais per US dollar (Reuters, September 9, 2026); the Mexican peso traded near 16.9 per dollar (Yahoo Finance, September 10, 2026).

Frequently Asked Questions

Why did Brent crude oil break above US$105?

Two shocks hit within hours: Iran said it attacked 10 ships after the US destroyed five Iranian tankers — the war’s biggest wave of attacks on shipping — and Saudi Arabia told OPEC its August output fell to 6.238 million barrels per day, the lowest since 1990.

How low is Saudi Arabia’s oil production?

Riyadh reported August output of 6.238 million barrels per day to OPEC, down 1.9 million bpd and below even April’s war low. Supply to market was higher, at 7.122 million bpd, implying the kingdom is drawing on storage.

What does the oil spike mean for Latin America?

Producers such as Petrobras and YPF earn more per barrel, but fuel subsidies, inflation and risk aversion bite elsewhere: Brazil added 6.6 billion reais (about US$1.3 billion) to fuel subsidies on September 9, the ECB raised rates to 2.50%, and Mexico’s peso slipped toward 17 per dollar.

Connected Coverage

The Iran war’s oil shock has moved from the Gulf into Latin American markets, budgets and central-bank thinking.

LatAm Oil Wrap: Hormuz Traffic Slows, Oil Proxies Jump 2.7%

Brent Above US$100: What It Means for Latin America

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