The price of oil breached the $100 threshold Wednesday, as new flare-ups in the United States’ war with Iran stoked fresh concern for global energy markets.
Prices did not stop there and continued rising throughout the day. The international benchmark, Brent crude, jumped 3.3% to end the trading session at $101.21 per barrel. U.S. crude oil ended the day higher by 3.2% at $96.05 per barrel.
For both critical oil benchmarks, it’s their highest closing levels since May 22.
Wednesday’s spike came a day after the U.S. military said it destroyed five Iranian tankers in response to attempted missile attacks on a Navy warship. Tehran responded with attacks on U.S. ships and a base in Jordan, the latest bout of fighting in a conflict that remains unresolved after months of global economic disruption.
Elsewhere new attacks by a Tehran-backed rebel group set oil facilities ablaze in Saudi Arabia and threatened a significant new escalation in that conflict.
Since the start of the year, both oil benchmarks have risen by nearly 70%. Since the beginning of the Iran war on Feb. 28, both have risen by nearly 40%.
The price of oil appears to be of significant concern to the White House and Republicans ahead of the midterm elections, with consumers facing higher prices as a result.
On Wednesday, President Donald Trump said that he believes that gas prices would come “tumbling down” below $2 per gallon but not until “right after the election” this coming November.
“I think it’s going to take a little bit longer than the midterms,” he said.
Gas prices rose to $4.22 earlier Wednesday morning, the highest level since June 5.
Earlier in the week, commodities experts warned that oil prices as measured by Brent could rise to $120 or even as high as $150 per barrel if the stalemate with Iran continues to drag on.
Oil exports from the Middle East have dwindled since the U.S. and Israel launched their war against Iran in February. A fifth of the world’s oil supply had flowed through the Strait of Hormuz, the key waterway that has been throttled by Tehran in response.
While the U.S. military has managed to restore some shipping traffic through Hormuz, other key trade routes have also faced disruption.
Iran-backed Houthi rebels in Yemen have attacked tankers in the Red Sea. This week, the group launched attacks on Saudi energy facilities that set oil sites ablaze and threatened a significant expansion of its conflict with the key U.S. ally.
Trump has shifted to a strategy of squeezing the Iranian economy with the U.S. maritime blockade, but recent days have seen a number of violent flare-ups.
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