The price of oil returned to triple digits in US dollars, as conflict in the Middle East threatens supply chains and puts a strain on global reserves.
Oil crude prices topped $100 ($86) a barrel on Wednesday for the first time since July amid concerns over oil supplies due to the conflict in the Middle East.
“The move towards and back above $100 Brent is reflecting a market that increasingly must change its view on how long the Middle East crisis will continue to curb supply from the region,” said Ole Hansen, head of commodity strategy at the Danish Saxo Bank.
The attacks on Saudi energy facilities by the Iranian-backed Houthisthreaten oil shipments on the Red Sea. This has been a key alternative route to the Strait of Hormuz path.
Meanwhile, the US attacked Iranian oil tankers in the Gulf of Oman and in the Strait of Hormuz. “Iran has used the tankers as part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies,” CENTCOM said in a statement.
Runing out of stock
Since the conflict in the Middle East started, oil exports have been reduced significantly, making some countries turn to their reserves.
The US has reported its lowest oil reserve since 1982, holding 289.7 million barrels. Former US President Joe Biden and President Donald Trump have used the reserve to cushion consumer prices amid the crisis.
The new price of the barrel is still below the peak reached early this year. In April, Brent jumped to $126 a barrel. Experts believe this is a big risk to a market with little room for capacity to absorb new disruptions occasioned by the war.
Edited by: Dmytro Hubenko
DW News
