The price of oil crossed the $100 a barrel mark for the first time since July as continued chaos in the Middle East spooked the market.
As the market opened on Wednesday, the price for Brent Crude – the benchmark for oil across the world – hit $100.19 at around 8.15am. It later dropped slightly to $99 shortly after.
The Middle East conflict escalated this week after Iranian-backed Houthi forces in Yemen launched strikes on several Saudi cities, drawing a key US ally further into the war.
Energy infrastructure in southern Saudi Arabia was targeted, including the 400,000-barrel-a-day Jazan refinery.
Meanwhile, the US military has said it’s destroyed five Iranian tankers carrying crude following attempts to strike a US Navy warship with ballistic missiles.
open image in galleryIran claimed to have attacked two American vessels and eight oil tankers in the Gulf. Shipping crews near Kuwaiti and Bahraini ports were warned to abandon their ships.
The latest attacks threaten to deepen disruptions to Middle East oil supplies, already strained by strikes on regional energy infrastructure and key shipping lanes.
Brent crude prices were last this high in late July and prices have jumped by a quarter since early August as hopes for a permanent resolution to the war faded and fighting has intensified.
Trump claimed on Tuesday that “oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran.”
He said on Truth Social: “Three Dollars a gallon, but ultimately, below Two Dollars a gallon. It will all happen quickly, and Iran will never have a Nuclear Weapon. MAGA!”
open image in galleryEuropean shares edged lower on Wednesday ahead of US inflation data, with Brent crude climbing to the cusp of key $100-per-barrel level as renewed tensions in the Middle East fanned inflation worries and curbed risk appetite.
The pan-European STOXX 600 was down 0.4 per cent at 646.84 points, as of 0810 GMT. Germany’s DAX edged 0.5 per cent lower, London’s FTSE lost 0.2 per cent, while France’s CAC 40 slipped 0.6 per cent.
Traders widely expect the European Central Bank (ECB) to raise rates on Thursday, the London Stock Exchange-compiled data showed, ahead of potentially market-moving US inflation data later this week.
A Reuters poll of 65 economists last Thursday had suggested the ECB would raise interest rates on Thursday for a second time and then end what would be its shortest hiking campaign in 15 years.