Oil Price Rises Above $100 Amidst Fresh Iran Attack

Adebayo Obajemu

Oil prices increased on Thursday, briefly trading above $100, and stock markets extended losses as fresh attacks against Gulf energy targets offset the release of crude reserves by major economies.

According to the International Energy Agency (IEA), the Mideast war is creating the largest supply disruption in the history of the global oil market. Though recently its member countries agreed to unlock 400 million barrels of oil from their reserves — their largest release ever. The move was unable to overcome fears about the choking of energy supplies, however, with the Strait of Hormuz — through which a fifth of global crude passes — effectively shut down by Iranian retaliatory attacks against ships and its Gulf neighbours.

An attack on two oil tankers off Iraq killed at least one crew member, while a cargo ship caught fire after being hit by shrapnel.

In its latest market report, the IEA said daily global crude production was down at least 8.0 million barrels, with an additional 2.0 million in petroleum products impacted, or about 7.5 percent of total daily production.

The price of Brent North Sea crude, the international benchmark, peaked at $101.59 per barrel on Thursday.

Prices pulled back only to rise again as US President Donald Trump said Thursday that stopping Iran from getting nuclear weapons was more important to him than controlling oil prices.

At $100 per barrel, Brent is up around 38 percent from the eve of the conflict which began 13 days ago when the United States and Israel launched airstrikes against Iran.

“Energy markets have been rattled by news of Iranian attacks on shipping in the Persian Gulf, along with missiles aimed at countries across the region,” said Trade Nation analyst David Morrison.

“The US’s inability to reopen the Strait of Hormuz and provide security for the shipping passing through, suggests that there are limits to their dominance,” he added.