Chicago, Mar 09: Oil prices eclipsed $114 per barrel for the first time since 2022 on Monday as the Iran war intensified, threatening production and shipping in the Middle East.
The price for a barrel of Brent crude, the international standard, surged past $114 after trading resumed on the Chicago Mercantile Exchange. That was up 23% from its Friday closing price of $92.69.
West Texas Intermediate, the light, sweet crude oil produced in the United States, also was selling for about $114 a barrel. That’s 25% higher than its close Friday at $90.90.
The war’s toll on civilian targets grew early Monday as Bahrain accused Iran of striking a desalination plant vital to drinking water supplies, and oil depots in Tehran smoldered following overnight Israeli strikes.
The increases followed the US crude price jumping by 36% and Brent crude rising by 28% last week. Oil prices have surged as the war, now in its second week, ensnared countries and places that are critical to the production and movement of oil and gas from the Persian Gulf.
Roughly 15 million barrels of crude oil — about 20% of the world’s oil — typically are shipped every day through the Strait of Hormuz, according to independent research firm Rystad Energy.
The threat of Iranian missile and drone attacks has all but stopped tankers from travelling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
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 also have attacked oil and gas facilities since the war started, exacerbating supply concerns.
The last time Brent and US crude futures traded near the current level was in 2022, after Russia invaded Ukraine.
The global surge in oil prices since Israel and the US attacked Iran on March 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.
