Oil has broken above $100 a barrel for the first time in two months as escalating Middle East tensions raise fears of disruption to global supplies, according to the Guardian.
Key facts
- The benchmark oil price rose above $100 a barrel on Thursday, the first time in two months.
- The price stood at $95 a barrel the day before.
- Fears centre on Yemen's Houthi militia potentially strangling Saudi oil exports through the Red Sea.
- US-Iran tensions over oil flows through the strait of Hormuz are intensifying.
- A threatened blockade at Bab al-Mandab was cited as a factor pushing prices higher.
The oil price has climbed back above $100 a barrel for the first time in two months, according to the Guardian, as a fresh escalation of the Middle East conflict threatens to compound disruption to global oil supplies.
The benchmark oil price rose sharply on Thursday, after reaching $95 a barrel the day before. The move reflects growing market anxiety over the security of key shipping routes in the region.
At the centre of those fears is Yemen’s Houthi militia, which the Guardian reports could strangle Saudi oil exports through the Red Sea. A threatened blockade at the Bab al-Mandab strait was cited as a factor pushing the price back above the $100 mark.
At the same time, tensions between the United States and Iran over oil flows through the strait of Hormuz are intensifying, adding a further layer of uncertainty to global supply expectations.
The Guardian also reported that shares slid as the conflict escalated, indicating that the disruption to energy markets is rippling into wider financial markets.
Both the Red Sea and the strait of Hormuz are critical arteries for global oil shipments, and any sustained disruption to either route heightens concerns among traders about the reliability of supply.
Why it matters
Oil prices above $100 a barrel typically feed through to higher fuel and energy costs, which can push up prices across the wider economy. Because the Red Sea and the strait of Hormuz carry a significant share of global oil shipments, disruption there raises the risk of prolonged supply strain and market volatility.
Frequently asked questions
Why has the oil price gone above $100 a barrel?
According to the Guardian, the benchmark oil price rose above $100 amid fears that Yemen's Houthi militia could strangle Saudi oil exports through the Red Sea, while US-Iran tensions over oil flows through the strait of Hormuz intensify.
When was oil last above $100 a barrel?
The Guardian reports that Thursday's move was the first time the benchmark oil price had passed $100 a barrel in two months.
What was the oil price before it passed $100?
The benchmark oil price reached $95 a barrel the day before rising sharply above $100 on Thursday, according to the Guardian.