Global oil prices have returned to $100 per barrel, reaching their highest level since July as escalating military conflict in the Middle East heightens fears of prolonged disruptions to international supply routes.
Brent crude rose 2.8% on Wednesday to breach the $100 benchmark, while U.S. West Texas Intermediate crude increased 2.9% to reach $95.70 per barrel. Year-to-date, both benchmarks have surged by more than 60%, pushing up global energy costs.
The price rally followed significant military developments in the region. U.S. Central Command confirmed strikes against four Iranian oil tankers in the Gulf of Oman and another vessel near Kharg Island, a vital Iranian export hub, in response to attempted missile attacks on a U.S. Navy warship. Tensions were further amplified after Iran-backed Houthi forces launched strikes against Saudi Arabian oil and energy infrastructure.
The persistent instability along the Strait of Hormuz and surrounding maritime corridors has severely constrained tanker movement, driving sharp increases in fuel products globally.
According to AAA data, U.S. retail gasoline prices rose by 7.3 cents per gallon on Wednesday to average $4.22 per gallon, marking the highest single-day jump since May. U.S. national average diesel prices also hit a record high of $5.94 per gallon, threatening to increase transportation and supply chain costs across commercial sectors.
“The combination of expensive diesel, jet fuel, bunker fuel and natural gas is particularly uncomfortable for consumers around the world, who see their disposable income shrinking,” said Ole Hansen, head of commodity strategy at Saxo Bank.
The energy price spike has rattled broader financial markets, with the S&P 500 falling 0.3% on Wednesday. Government bond yields also spiked, with the U.S. 10-year Treasury yield trading near 4.8% as investors prepare for potential central bank policy adjustments to address renewed inflationary pressure.
