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

Oil Prices Surge Past $100 as Middle East Conflict Intensifies

Brent crude oil briefly topped $100 per barrel early Thursday, just days after spiking near $120, sending fresh shockwaves through global financial markets as the conflict between Iran and Israel continues to escalate.

The latest price surge came as Iran intensified attacks on commercial shipping around the Strait of Hormuz, a critical chokepoint through which approximately one-fifth of the world’s traded oil passes daily. Oil markets reacted swiftly, with Brent crude jumping 5.3% to about $97 per barrel, while U.S. benchmark crude rose 4.5% to around $91 per barrel.

Iran has systematically targeted oil infrastructure, including fields and refineries in Gulf Arab nations, as part of its strategy to create economic pressure on the United States and Israel. The attacks have effectively halted cargo traffic through the Strait of Hormuz, severely disrupting global supply chains and energy markets.

“The swings in Brent crude oil prices over the past several days are eye-catching and odds are volatility will remain because of the absence of a timeline for when the conflict will de-escalate,” Oxford Economics noted in a report. The analysis suggests oil prices could spike as high as $140 per barrel depending on how events unfold.

In response to the crisis, the International Energy Agency (IEA) announced Wednesday its largest emergency oil reserve release in history, pledging to make 400 million barrels available to stabilize markets. The United States plans to contribute significantly to this effort by releasing 172 million barrels from its Strategic Petroleum Reserve next week specifically to combat rising prices.

The coordinated response follows a meeting of energy ministers from G7 nations—the United States, Canada, France, Italy, Japan, Germany, and Britain—who gathered in Paris to discuss strategies for containing price increases that threaten global economic stability.

Despite these interventions, uncertainty continues to dominate markets. Major stock indices worldwide fell on Thursday amid fears that oil prices could climb even higher. In Europe, Germany’s DAX lost 0.4%, while France’s CAC 40 dropped 0.7%. Britain’s FTSE 100 declined 0.7%. Asian markets followed suit, with Tokyo’s Nikkei 225 falling 1%, Hong Kong’s Hang Seng shedding 0.7%, and Australia’s S&P/ASX 200 dropping 1.3%.

U.S. futures also pointed downward, with S&P 500 futures losing 0.4% and Dow Jones Industrial Average futures down 0.5%. This follows Wednesday’s trading session in which the Dow Jones Industrial Average dropped 0.6% to its lowest level this year.

Since the outbreak of hostilities, oil price volatility has triggered dramatic swings in financial markets worldwide, sometimes changing direction within hours. The situation has revived concerns about stagflation—a toxic combination of high inflation and economic stagnation that presents a particularly difficult challenge for central banks.

These fears are compounded by recent U.S. inflation data. A report released Wednesday showed that U.S. consumers paid prices for groceries, gasoline, and other necessities that were 2.4% higher in February than a year earlier. While this matched the previous month’s reading and came in slightly below economists’ expectations of 2.5%, it remains above the Federal Reserve’s 2% target.

Notably, the inflation figures do not yet reflect the impact of this month’s gasoline price increases resulting from the Middle East conflict, suggesting potential further pressure on consumer costs in coming reports.

The economic outlook is further complicated by signs of weakness in U.S. employment, which, combined with sustained inflationary pressures from energy costs, intensifies stagflation concerns.

As the U.S. campaign of airstrikes in Iran enters its thirteenth day with no signs of de-escalation, markets remain on edge, bracing for continued volatility in both energy prices and broader financial assets.