Global oil prices have climbed back above $100 per barrel, reaching their highest level since July as escalating military tensions in the Middle East heighten fears of prolonged disruption to global energy supplies.
Brent crude rose 2.8 per cent on Wednesday to breach the $100-a-barrel mark, while US West Texas Intermediate (WTI) crude gained 2.9 per cent to $95.70 per barrel.
Both benchmarks have risen by more than 60 per cent since the beginning of the year, adding to concerns over rising energy and transportation costs worldwide.
The latest price surge followed a series of military developments in the Middle East. US Central Command reportedly confirmed strikes on four Iranian oil tankers in the Gulf of Oman and another vessel near Kharg Island, a major Iranian oil export hub, following attempted missile attacks on a US Navy warship.
Tensions increased further after Iran-backed Houthi forces reportedly launched attacks on Saudi Arabian oil and energy infrastructure.
The continued instability around the Strait of Hormuz and nearby maritime routes has also restricted tanker movement, contributing to sharp increases in the cost of fuel products.
In the United States, retail petrol prices rose by 7.3 cents per gallon on Wednesday to an average of $4.22, according to AAA data, marking the biggest single-day increase since May.
National average diesel prices also reached a record $5.94 per gallon, raising concerns that higher fuel costs could increase transportation expenses and put further pressure on supply chains.
“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 rise in energy prices has also unsettled financial markets, with the S&P 500 falling 0.3 per cent on Wednesday.
US government bond yields climbed as investors assessed the potential impact of renewed inflationary pressure on monetary policy and the possibility of adjustments by central banks.
Market participants are now closely monitoring developments in the Middle East and the Strait of Hormuz, with further escalation potentially putting additional pressure on global oil supplies and energy prices.
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