Oil Prices Soar Past $100 as Middle East Tensions Escalate

Oil prices have surpassed $100 a barrel for the first time in almost six weeks due to attacks on oil facilities and ships in the Middle East. The U.S. military reported striking five Iranian tankers in response to attempted missile attacks on a Navy warship, and Iran-backed Houthi rebels ignited fires at oil facilities in Saudi Arabia.

The Brent crude price jumped 2.4% to $100.29 early Wednesday after the attacks disrupted shipping and raised fears of tighter global energy supplies. The price spike is concerning for consumers, businesses, and economies worldwide, particularly outside the U.S., where higher energy costs have weighed heavily on them this year.

Bank of America analysts increased their oil price forecast for the second half of the year to $83 a barrel due to more persistent disruptions to the Strait of Hormuz. If attacks continue to choke off traffic, prices could reach $95-$120 a barrel, while damage to major energy infrastructure could produce spikes of up to $150 a barrel.

The effects on American consumers are still a concern for President Donald Trump and the Republican Party as November midterm elections approach. A gallon of regular gasoline averaged $4.15 in the U.S. on Tuesday, up 26% from a year ago, while diesel costs 59% more than it did last year.