Oil Surges Above $100 as ECB Raises Interest Rates Amid Inflation Concerns

Oil prices have surged above $100 per barrel, sparking concerns that higher fuel costs could be the next major economic shock. The price hike comes as the European Central Bank (ECB) raised interest rates by a quarter percentage point to combat inflation driven by soaring energy costs linked to the war in Iran.

The ECB's move was made at a meeting in Berlin, away from its Frankfurt headquarters, where it increased its benchmark interest rate to 2.50%. The decision was based on a stronger-than-expected economy that suggests businesses can withstand higher borrowing costs.

However, the ECB also warned that inflation is set to remain well above target for an extended period due to ongoing conflict in the Middle East and reduced tanker traffic through the Strait of Hormuz.