Global Oil Prices Surge Above $100 As Iran Escalates Attacks In Gulf

Global oil prices surged above $100 per barrel on Thursday as rising tensions between Iran, the United States and Israel intensified fears of supply disruptions in the Middle East, overshadowing a record release of emergency crude reserves by the International Energy Agency.

The spike in prices comes as US-Israel strikes on Iran entered their third week, with the conflict showing no signs of easing. Tehran has responded with fresh retaliatory attacks across the Gulf region, raising concerns about the security of vital energy supply routes.

Brent crude jumped more than nine per cent to as high as $101.59 per barrel, while West Texas Intermediate surged close to $96.

Naija News reports that the two benchmark contracts had already surged nearly 30 per cent earlier in the week, briefly approaching $120 per barrel.

Analysts warn that if hostilities persist, oil could remain between $90 and $100 per barrel for an extended period.

In an attempt to stabilise global markets, the International Energy Agency announced on Wednesday that its members had agreed to release 400 million barrels of oil from strategic reserves, the largest coordinated release in the agency’s history.

Of that volume, 172 million barrels will come from the United States.

However, the move failed to calm markets as traders remain focused on the threat to energy shipments from the Middle East.

The Strait of Hormuz, through which roughly one-fifth of the world’s crude oil supply passes, has effectively been shut down due to the escalating conflict.

Analysts say the disruption to the critical shipping lane could have major consequences for global energy markets.

Iran has intensified efforts to disrupt regional energy supplies.

On Thursday, two oil tankers in Iraqi waters were reportedly struck, while Baghdad confirmed it had already begun cutting oil output because of the crisis.

Kuwait and major producer Saudi Arabia are also said to have reduced production.

Bahrain reported that Iranian forces carried out an attack on fuel storage facilities in the country, while Saudi Arabia said its air defence systems intercepted drones headed for the Shaybah oil field.

Iranian officials have warned that the war could evolve into a prolonged conflict with severe economic consequences for the world.

Ali Fadavi, an adviser to Iran’s Revolutionary Guards commander-in-chief, said Tehran was prepared for a long war of attrition.

“The United States and Israel must consider the possibility that they will be engaged in a long-term war of attrition that will destroy the entire American economy and the world economy,” Fadavi told state television.

The Revolutionary Guards also warned that they could target “economic centres and banks” connected to US and Israeli interests.

Tehran had earlier fired on two commercial ships and threatened vessels belonging to the United States or its allies.

The surge in oil prices has heightened fears of renewed inflation and possible interest rate hikes by central banks.

Only weeks ago, policymakers had been considering cutting rates amid signs of slowing inflation.

Those concerns have weighed heavily on global stock markets.

Major Asian markets all fell sharply on Thursday, with Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Bangkok, Wellington, Singapore, Taipei, Manila and Jakarta posting losses.

In Europe and the United States, stocks also retreated.

The shipping lane also carries roughly one-third of the fertiliser used in global food production, meaning prolonged disruption could affect food supply chains.

Airlines are among the sectors already feeling the pressure. Many carriers are reconsidering flight paths across the Middle East while grappling with rising fuel costs.

Air New Zealand announced on Thursday that it would cut 1,100 flights over the next two months due to the growing crisis.

According to AFP, market analysts believe the emergency release of oil reserves is unlikely to solve the deeper supply problem.

Stephen Innes of SPI Asset Management said the move could only provide temporary relief.

“When the geopolitical fire alarm is still ringing around the Strait of Hormuz, dumping barrels from emergency stockpiles is less a solution than a symbolic gesture,” he said.

“It might dampen volatility for a few hours, but it cannot change the geometry of risk when the world’s most important shipping artery is under threat.”

“In trading desk language, the IEA release is the equivalent of pointing a garden hose at a refinery blaze.”

Saxo Markets analyst Neil Wilson added that the release had already been priced into markets earlier in the week.

He noted that the conflict had already resulted in the loss of about 200 million barrels of oil supply.

“Reserves are stockpiles sitting as existing inventory, the market is more concerned about flows,” Wilson said.

“Moving barrels from point A to point B is not the same as producing new oil.”

Despite the escalating conflict, former US President Donald Trump insisted that the strikes had already significantly weakened Iran.

“They are pretty much at the end of the line,” Trump told reporters.

During a speech to supporters, he also declared: “We’ve won… we won in the first hour, it was over.”

However, Israel’s military suggested the campaign was far from over, saying it still had “a broad bank of targets.”

Key Market Figures

As of around 0330 GMT:

• West Texas Intermediate: Up 8.6% at $94.72 per barrel
• Brent North Sea Crude: Up 9.0% at $100.29 per barrel
• Tokyo – Nikkei 225: Down 2.1%
• Hong Kong -Hang Seng: Down 1.2%
• Shanghai Composite: Down 0.6%
• Currencies also shifted as investors sought safer assets.
• Euro/dollar: $1.1537
• Pound/dollar: $1.3370
• Dollar/yen: 159.03 yen

Meanwhile, Wall Street and London markets closed lower.