Oil Prices Soar Above $100 a Barrel Amid Escalating Middle East Conflict

The price of Brent crude oil has surpassed US$100 a barrel for the first time since May, and this time it's not just a temporary spike. The conflict in the Middle East is intensifying, and reserves have already been partially depleted.

This is not the first time Brent crude has broken above US$100 a barrel. It happened earlier this year during the US-Israeli war on Iran and again when Russia invaded Ukraine in 2022.

The latest price surge is fueled by attacks on Saudi tankers in the Red Sea by pro-Iranian Houthi rebel forces in Yemen, which could cut off millions of barrels of oil exports. The world economy consumes over 100 million barrels of oil daily, but production has been below pre-war levels by around 9.4 million barrels a day since mid-July.

Maya Senussi of Oxford Economics warns that if the Red Sea and the Strait of Hormuz were both effectively closed to traffic, the price of oil could eventually pass US$160 a barrel.