Brent crude oil briefly tops $100 a barrel as Iran attacks on shipping worsen supply concerns

BANGKOK — Early on Thursday, the price of a barrel of Brent crude oil temporarily surpassed $100, a few days after it surged close to $120 in the most recent shocks to financial markets and the world economy.

When Iranian strikes on commercial vessels near the Strait of Hormuz increased supply fears, oil prices first surged more than 9%. Today marks the thirteenth day of the U.S. airstrike campaign in Iran.

The benchmark price of crude oil in the United States increased 4.5% to almost $91 per barrel. At almost $97 per barrel, the worldwide standard, Brent, was up 5.3%.

Iran has intensified its attacks in an effort to cause enough economic suffering for the entire world to put pressure on Israel and the United States to put an end to the conflict. However, there was no indication that the conflict would end.

A fifth of all traded oil goes via the narrow Strait of Hormuz, which Iran has effectively blocked by targeting oil fields and refineries in Gulf Arab countries.

In an effort to mitigate the impact of the war on energy markets, the International Energy Agency decided on Wednesday to release 400 million barrels of oil, the greatest amount of emergency oil reserves in its history. In an effort to counteract rising costs, the United States intends to release 172 million barrels of oil from its Strategic Petroleum Reserve next week.

However, the ongoing conflict and uncertainty have increased anticipation that prices may rise even further, which has caused shares to decline.

The Dow Jones Industrial Average's future was down 0.5%, while the S&P 500's was down 0.4%.

The Paris CAC 40 dropped 0.7% to 7,982.64, while Germany's DAX fell 0.4% to 23,533.60. The FTSE 100 in Britain fell 0.7% to 10,285.91.

Tokyo's Nikkei 225 dropped 1% to 54,452.96 during Asian trading. The Hang Seng in Hong Kong dropped 0.7% to 25,716.76, while the Kospi in South Korea dropped 0.5% to 5,583.25.

The S&P/ASX 200 fell 1.3% to 8,629.00 in Australia, while the Shanghai Composite index fell 0.1% to 4,129.10.

U.S. equities saw minimal movement on Wednesday, with the S&P 500 falling 0.1% for a second day of moderate movements after a wild stretch brought on by the conflict with Iran. The Nasdaq composite increased 0.1%, but the Dow Jones Industrial Average fell 0.6% to its lowest point of the year.

Sharp changes in oil prices have caused global financial markets to fluctuate, often hourly, since the beginning of the conflict. This week, there was a brief increase in oil prices to their highest levels since 2022 due to the potential long-term blockage of Middle Eastern supply, which generated concerns about a spike in crippling inflation for the world economy.

According to an Oxford Economics report, "the swings in Brent crude oil prices over the past several days are eye-catching and odds are volatility will remain because there is no timeline for when the conflict will de-escalate and when the Strait of Hormuz, which is effectively closed, will see traffic begin to recover."

According to the degree of volatility, oil prices could rise as high as $140 per barrel based on news developments.

According to a survey published on Wednesday, American consumers paid 2.4% more in February than they did a year ago for food, gas, and other living expenses.

That is the same amount as the previous month and better than the 2.5% that analysts predicted, but it is still higher than the Federal Reserve's 2% target and does not account for the war-related increase in gas prices this month.

The worst-case scenario known as "stagflation," which the Federal Reserve lacks effective tools to address, would result from high inflation coupled with a stagnating economy. Fears of stagflation are growing due to lackluster hiring practices by U.S. firms as well as rising oil costs.

The dollar dropped from 158.95 Japanese yen to 158.84 yen in other transactions early on Thursday. The euro dropped from $1.1566 to $1.1553.