Oil Prices Soar Past $100 as Tensions in Middle East Escalate

Global crude oil markets witnessed extreme volatility last week due to escalating geopolitical tensions in the Middle East. Brent crude futures surged 7% on Thursday, breaking above the $100 per barrel mark for the first time since May. The price of Brent remained near the $100 level throughout Friday, despite a slight retreat.

The surge in oil prices was primarily driven by attacks on Saudi oil tankers in the Red Sea by Iran-aligned Houthi rebels. This escalation opened a new front in the conflict, with the threat now spreading from the Strait of Hormuz to the Red Sea. The US military carried out strikes on Iran for the 13th consecutive night, while Iran retaliated with strikes on US-linked military installations in Jordan and Kuwait.

The attacks have raised fears about potential supply disruptions, particularly if both the Strait of Hormuz and the Bab el-Mandeb strait are effectively closed to traffic. Analysts warn that this could lead to oil prices reaching $160 per barrel or more. Kazakhstan's energy ministry reported that oil companies temporarily reduced production after suspected Ukrainian drone attacks forced the country's main Black Sea export terminal to close.