Middle East Conflict Drives Oil Prices Above $100 Barrel
Oil prices have surged to over $100 a barrel for the first time in six weeks as tensions in the Middle East intensify. Benchmark Brent crude futures rose by 2.05% to reach $99.93 per barrel, while US West Texas Intermediate crude was up 1.60% at $94.52 per barrel.
The price increase is attributed to the ongoing conflict between the US and Iran, which has been ongoing since February 28. Hopes for a permanent resolution have faded, causing oil prices to rise by a quarter since early last month.
Attacks by Iran-backed Houthis on Saudi energy facilities have set oil installations ablaze, threatening a significant expansion of the conflict. This has led market participants to price in a more prolonged conflict and potential disruptions to oil flows from the Middle East.
Claudio Galimberti, Chief Economist at Rystad Energy, noted that roughly 8 million to 9 million barrels per day had flowed through Hormuz before the recent escalation of fighting. However, this has now fallen below 2 million barrels per day.