Durrant Pate/Contributor
Global oil prices have surged past US$100 per barrel for the first time in nearly four years.
At the time of writing, WTI crude was trading at US$108.66, up $17.76 or 19.54%, while Brent crude was at $US108.69, up $16.00 or 17.26%. Since then, the prices have settled a bit lower.
The movement in global oil prices has been ballooning, as the US/Israel and Iran conflict escalated with more bombings taking place on the weekend, with attacks on energy infrastructure and military targets across the region, heightening fears that oil flows from the Middle East could be disrupted for weeks, according to oilprice.com.
This latest surge in price comes as Ayatollah Mojtaba Khamenei was chosen as the supreme leader, replacing his father, the slain Supreme Leader, Ali Khamenei. The appointment early Monday signals continuity in Iran’s hardline leadership, undermining the efforts of both the US and Israel to alter the regime.
Israel struck major fuel storage facilities near Tehran, while Iran continued launching drone and missile attacks across the region. A drone strike damaged a desalination plant in Bahrain, a missile barrage injured five people in central Israel, and a seventh US service member died following an Iranian counterattack in Saudi Arabia.
Financial market feeling the pinch
Beyond oil prices, financial markets also suffered, with S&P 500 futures and Nasdaq-100 futures both falling by close to 1.6% as investors reacted to the surge in energy prices and geopolitical risk. Fears of prolonged supply disruptions, including potential attacks on regional energy infrastructure and tanker traffic, are now being priced in to markets.
Oilprice.com is reporting that energy traders are closely watching whether the conflict will affect production or exports from major Gulf producers. The surge in crude prices has also strengthened the US dollar and raised fears of an energy-driven inflation shock, particularly for major oil-importing economies.
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