Iraq, Kuwait and the UAE have cut their oil production as storage tanks fill due to the reduced ability to export crude. Iran, Israel and the United States have also attacked oil and gas facilities since the war started, exacerbating supply concerns.
The last time US crude futures traded above US$100 per barrel was Jun 30, 2022, when the price reached US$105.76. For Brent, it was Jul 29, 2022, when the price hit US$104 per barrel.
The global surge in oil prices since Israel and the US attacked Iran on Mar 1 has rattled financial markets, sparking worries that higher energy costs will fuel inflation and lead to less spending by US consumers, the main engine of the economy.
In the US, a gallon of regular gasoline rose to US$3.45 on Sunday, about 47 cents more than a week earlier, according to AAA motor club. Diesel was selling for about US$4.60 a gallon, a weekly increase of about 83 cents.
The price of natural gas has also climbed, though not as much as oil. It rose about 11 per cent last week and ended Friday at US$3.19 per 1,000 cubic feet.
If oil prices stay above US$100 per barrel, some analysts and investors say it could be too much for the global economy to withstand.
Over the weekend, Israel’s military struck oil depots in Tehran and four oil storage tankers and a petroleum transfer terminal.
Mohammad Bagher Qalibaf, the speaker of Iran’s parliament, said the war’s impact on the oil industry would spiral, warning it soon could become harder to produce and sell oil.
Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which may need to look elsewhere for supply if Iran’s exports are disrupted, another factor that could increase energy prices.
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