Oil prices soared above $100 a barrel as Iran closed the Strait of Hormuz, sparking inflation fears and global market losses amid Middle East conflict.
LONDON: Oil prices surged above USD 100 per barrel as Iran’s new supreme leader ordered the Strait of Hormuz to remain closed.
Global stock markets extended losses amid fears of a prolonged conflict disrupting energy supplies.
The international benchmark Brent crude peaked at USD 101.59 per barrel.
This represents a 38% increase since the conflict began with US and Israeli airstrikes on Iran.
Iran’s new leader, Mojtaba Khamenei, called for using “the lever of blocking the Strait of Hormuz”.
The Revolutionary Guards vowed to carry out the order, which threatens a fifth of the world’s oil and gas shipments.
US Energy Secretary Chris Wright acknowledged the military was “not ready” to escort tankers through the critical waterway.
Analyst Chris Beauchamp said markets realised the US would not quickly end the war or establish a convoy system.
Prices pared gains slightly after Iran said it allowed ships from some countries to cross.
The International Energy Agency called it the largest supply disruption in oil market history.
Member countries agreed to unlock 400 million barrels from reserves, their largest ever release.
Analyst David Morrison said the move failed to cap prices and suggested panic.
Research director Kathleen Brooks warned elevated oil prices would cause a lasting inflation shock.
Wall Street and European stock indices fell more than one percent.
US investment analyst Bret Kenwell said sustained high oil prices would pressure business margins and growth.
The US dollar strengthened due to safe-haven demand and inflation fears.
