Global oil prices have surged above $100 per barrel for the first time since July, as escalating conflict in the Middle East raises fresh concerns about disruptions to crude oil supplies and shipping through the strategic Strait of Hormuz.
Brent crude, the global benchmark, rose by $3.29, or 3.4 per cent, on Wednesday to settle at $101.21 per barrel after reaching an intraday high of $101.58. US West Texas Intermediate crude also gained $3.02, or 3.25 per cent, to close at $96.05 per barrel. Both benchmarks recorded their highest closing levels since May 22.
The latest price surge followed a new escalation in the conflict involving the United States and Iran, including attacks on oil tankers in and around the Gulf. Iran has also threatened shipping interests in the region, while Houthi attacks on Saudi Arabia have heightened concerns about the safety of energy infrastructure and transportation routes.
The Strait of Hormuz has become a major focus of the crisis because it previously carried about one-fifth of global oil supplies. Reuters reported that crude flows through the waterway have fallen sharply, with current volumes dropping below two million barrels per day amid the conflict and heightened shipping risks.
The disruption has added to concerns about already-tight global oil supplies. The International Energy Agency expects global oil supply to decline by about 4.3 million barrels per day this year, while analysts have warned that limited spare capacity and falling inventories could leave the market vulnerable to further disruptions.
The latest increase is also putting pressure on fuel markets and raising fears of another wave of global inflation. Higher crude prices could increase the cost of petrol, diesel, aviation fuel, transportation and other goods, while also complicating efforts by central banks to bring inflation under control.
Oil prices had already risen sharply in recent weeks, with Brent gaining roughly 25 per cent since early August as expectations of a quick resolution to the Middle East conflict faded. The latest attacks have further increased the risk premium attached to crude prices.
Analysts are now closely watching developments around the Strait of Hormuz and regional energy infrastructure. A prolonged disruption could push prices significantly higher, while any meaningful de-escalation could ease some of the pressure on global oil markets.
The development is particularly significant for oil-producing countries such as Nigeria, where movements in international crude prices can affect government revenue, foreign exchange earnings and the broader economy, even though domestic petrol prices do not always move in direct proportion to global crude prices.
