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The price of oil has risen above $100 a barrel for the first time since July as the escalating conflict in the Middle East threatens further disruption to global supplies. Brent crude, the international benchmark for oil prices, rose 2.1% to over $100 a barrel after tensions stepped up in the Gulf amid the latest tit-for-tat exchange of fire between the US and Iran. The US military said it had ‘destroyed’ multiple Iranian tankers after Tehran attempted to strike a US navy warship with ballistic missiles.
In a further escalation, the Iran-backed Houthis attacked four cities in Saudi Arabia overnight, wounding more than 70 people and setting oil installations ablaze. The price has jumped by a quarter since early August as hopes for a permanent resolution to the six-month-old war faded and fighting flared again. Oil prices have fluctuated in the six months since Tehran’s block on the Strait of Hormuz triggered fears of the greatest energy supply disruption in history.
In late February, US-Israeli attacks on Iran caused oil prices to surge past $100, with analysts predicting they could reach $150. Prices peaked at $126 in April but later fell amid ceasefire hopes. They began climbing again after a US-Iran agreement collapsed and hostilities resumed.
Gas prices have also risen, with UK natural gas prices hitting the highest level in three and a half years. The rise in energy prices has fueled inflation fears and expectations of higher interest rates this year, with US economists anticipating at least one rate hike from the Federal Reserve by year-end.
Source: The Guardian
