The price of oil has risen above $۱۰۰ 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 ۲.۱% to over $۱۰۰ 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 expansion of the war, the Iran-backed Houthis attacked four cities in Saudi Arabia overnight, wounding more than ۷۰ 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 as fighting flared again.
Oil prices have fluctuated in the six months since the start of Tehran’s block on the strait of Hormuz triggered what many feared would be the greatest energy supply disruption in history.
In the first weeks after the first US-Israeli attacks on Iran in late February, oil prices surged past $۱۰۰ a barrel and analysts predicted that prices could rise to as high as $۱۵۰ as flows through Hormuz came to a halt.
The oil price peaked at $۱۲۶ in April during the conflict, but later fell back amid hopes of a ceasefire in the region. The price then began to climb again after a memorandum of understanding between the US and Iran fell apart and hostilities restarted.
Gas prices have also risen on the back of the conflict. UK natural gas prices hit the highest level in three and a half years this month.
The rise in energy prices has stoked fears around inflation and the prospect of higher interest rates this year. In the US, economists are expecting at least one interest rate rise from the Federal Reserve by the end of the year.
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