Oil Prices Soar Past $100 as US-Iran Conflict Escalates
Oil prices surged past $100 per barrel on Wednesday as tensions between the US and Iran continued to escalate. The price of Brent crude, an international benchmark, reached a high of $101.55 before settling at $101.32, while U.S. West Texas Intermediate crude hit its highest level since early June, reaching $96.48.
The spike in oil prices was tied to new flare-ups in the US-Iran conflict, including the destruction of five Iranian tankers by the US military. Ole Hansen, head of commodity strategy at Saxo Bank, said that the market is reflecting a growing concern about how long the Middle East crisis will continue to curb supply from the region.
The Strait of Hormuz, which carries about one-fifth of the world's oil and liquefied natural gas (LNG), has seen significant disruption in shipping volumes. According to Reuters, only six commodity vessels passed through the strait on Tuesday, down from nine a day earlier and below the 10-day average of about 12.
The surge in oil prices is also having an impact on gasoline prices, which rose to $4.22 per gallon on Wednesday, the highest since early June. Bank of England governor Andrew Bailey warned that the latest rise in oil prices is putting pressure on inflation and interest rates.