$100 Oil: Escalating Conflict Drives Energy Prices Higher
Oil prices surged above $100 per barrel on Wednesday for the first time since July, driven by escalating US-Iran conflict and fears of disruptions to energy shipments through the Strait of Hormuz. The risk-off mood pushed U.S. equities lower, with the Dow Jones Industrial Average falling about 0.7%.
The U.S. military destroyed five Iranian crude tankers in retaliation for attempted ballistic-missile attacks by Iran's Islamic Revolutionary Guard Corps on a US Navy warship. This rapid escalation revived concerns about oil flows from the Middle East, particularly through the Strait of Hormuz.
Brent crude rose above $100 a barrel, its first breach of this threshold since July 24. U.S. West Texas Intermediate crude also moved higher, trading in the mid-$94 range. Energy stocks were among the few areas of strength as higher crude prices improved earnings outlook for oil producers and refiners.
The broader market struggled under the prospect that sustained rise in fuel costs could reignite inflation pressures just as investors await key US economic reports. European natural-gas prices also climbed close to 4%, trading near €79 per megawatt-hour, a multi-year high.