US-Israel conflict drives oil prices to record highs over $100 per barrel

Crude Oil Prices Rise Sharply Amid Conflict in Iran

The price of crude oil surged more than 20 percent on Sunday, reaching a level not seen since Russia’s invasion of Ukraine in 2022. The increase was driven by concerns over the impact of the conflict between the United States and Israel on global energy supplies.

Brent crude, the international benchmark, rose to $114 per barrel at one point, before moderating slightly to around $107.50 as of 02:30 GMT on Monday. The surge in prices has been attributed to Iran’s decision to halt shipping through the Strait of Hormuz, which is a critical waterway for oil exports.

The United States and Israel launched joint strikes on Iran on February 28, leading to a significant increase in crude oil prices. Since then, prices have risen by about 50 percent. Iraq, the United Arab Emirates, and Kuwait, three of the largest producers in OPEC, have cut production due to the effective closure of the Strait of Hormuz.

Iran has blamed multiple attacks on energy facilities across the Gulf for disrupting supplies. Israel carried out air strikes targeting Iran’s oil infrastructure on Saturday, hitting four oil storage facilities and an oil production transfer centre in Tehran and the province of Alborz.

The International Monetary Fund has estimated that a sustained 10 percent rise in oil prices can result in a 0.4 percent increase in inflation and a 0.15 percent reduction in global economic growth. US President Donald Trump downplayed the impact of the price surge, stating that it would be “a very small price to pay” for safety and peace.

US Secretary of Energy Chris Wright also expressed confidence that prices would return to normal once the conflict is resolved. Stocks in Asia fell sharply on Monday morning as investors braced for the fallout of rising energy prices.

Source: Al Jazeera