Oil prices have exceeded $100 per barrel for the first time in over three and a half years, due to the ongoing conflict in Iran, which is disrupting production and shipping in the Middle East. The price of a barrel of Brent crude, the international standard, was trading at $101.19 yesterday, up 9.2% from its Friday closing price of $92.69. Amidst rising global oil prices, US President Donald Trump stated that the short-term increase is worthwhile if it eliminates Iran's nuclear threat. In a post on Truth Social, Trump argued that oil prices would rapidly decline once Iran's nuclear capabilities are neutralized, calling it a small price to pay for American and global safety and peace. The fear of Iranian missile and drone attacks has nearly halted tanker traffic through the Strait of Hormuz. This strait is a crucial passage for oil and gas exports from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.
Oil prices have surged as the conflict has affected countries and regions that are critical to the production and transportation of oil and gas from the Persian Gulf. The last time US crude futures traded above $100 per barrel was on June 30, 2022, when the price reached $105.76. For Brent, it was July 29, 2022, when the price hit $104 per barrel.
