Crude oil prices surpass $US100 a barrel
Oil prices surpassed US$100 per barrel for the first time in more than three and a half years as the Iran war hindered production and shipping in the Middle East.
The price of a barrel of Brent crude, the international standard, stood at US$101.19 (A$A144.78), up 9.2 per cent from Friday’s settlement price of US$92.69 (A$A132.62), shortly after trading resumed on the Chicago Mercantile Exchange on Monday.
West Texas Intermediate, a light, sweet crude oil produced in the United States, was selling for around US$107.06 ($A153.18) per barrel.
This is 16.2 per cent higher than Friday’s settlement price of US$90.90 ($A130.06).
Both may rise or fall as market trading continues.
The increases come after US crude oil prices rose 36 percent last week and Brent crude oil prices rose 28 percent.
Oil prices have risen as the war, now in its second week, ensnares countries and locations critical to the production and movement of oil and gas in the Persian Gulf.
About 15 million barrels of crude oil (about 20 percent of the world’s oil) are typically transported through the Strait of Hormuz each day, according to independent research firm Rystad Energy.
The threat of Iranian missile and drone attacks has virtually prevented tankers from passing through the strait, which borders Iran to the north and carries oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
Iraq, Kuwait and the UAE cut oil production as storage tanks filled due to reduced crude oil exports. Iran, Israel and the USA have also attacked oil and gas facilities since the start of the war, increasing supply concerns.
The last time US crude futures traded above US$100 per barrel (US$A143) was on 30 June 2022, when the price reached US$105.76 (US$A151.32). For Brent, the date on which the price reached US$104 per barrel (US$A149) was 29 July 2022.
The global increase in oil prices since Israel and the United States attacked Iran on March 1 has shaken financial markets; It has raised concerns that higher energy costs will increase inflation and cause U.S. consumers, the main engine of the economy, to spend less.
A gallon of regular gasoline in the US rose to US$3.45 ($A4.94) on Sunday, up about 47 cents from a week ago, according to the AAA motor club. Diesel was selling for about US$4.60 ($A6.58) per gallon, a weekly increase of around 83 cents.
The price of natural gas has also increased, although not as much as oil. It rose nearly 11 per cent last week and finished Friday at US$3.19 ($A4.56) per 1,000 cubic feet.
If oil prices remain above US$100 ($A143) per barrel, some analysts and investors say it may be too much for the global economy to bear.
Over the weekend, the Israeli army hit oil depots, four oil storage tankers and an oil transfer terminal in Tehran.
The speaker of the Iranian parliament, Mohammed Bagher Qalibaf, said that the impact of the war on the oil industry will gradually increase and warned that it may soon become difficult to produce and sell oil.
Iran exports approximately 1.6 million barrels of oil per day, mostly to China; If Iran’s exports are disrupted, China may need to look elsewhere for supplies, another factor that could increase energy prices.
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