Oil Prices Near $100 as Middle East Escalation Stokes Supply Fears
Brent crude nears $100 a barrel as escalating US-Iran tensions threaten energy supplies and fuel fears that renewed inflation could push central banks toward higher interest rates
ERBIL (Kurdistan24) — Oil prices climbed more than 1 percent toward $100 a barrel on Wednesday as renewed military escalation in the Middle East heightened fears of supply disruptions, while global stocks came under pressure ahead of crucial US inflation data that could influence the Federal Reserve’s next interest-rate decision.
Brent crude rose as high as $99.68 a barrel, approaching the $100 mark for the first time since July, while West Texas Intermediate (WTI) climbed toward $95, its highest level since June. By around 0715 GMT, Brent was up 1.6 percent at $99.49, while WTI had gained 1.4 percent to $94.37.
The latest surge followed a fresh escalation in the US-Iran conflict, which has entered its seventh month with no clear sign of de-escalation despite White House claims that a deal could be imminent.
Iran said Wednesday that it had struck a US military base in Jordan after American attacks on Iranian vessels in the Strait of Hormuz. Tehran also threatened to target oil tankers operating off Kuwait and Bahrain and urged crews to leave their ships, according to Iran’s state-run IRNA news agency.
The developments have intensified concerns over the security of the Strait of Hormuz, one of the world’s most important energy corridors, through which a significant share of global oil and gas supplies normally passes.
The confrontation has also affected alternative energy routes. Saudi Arabia and Iran-backed Houthis in Yemen exchanged strikes, with the Houthis targeting oil facilities as part of an offensive toward the Bab al-Mandab chokepoint. The Red Sea route has become increasingly important for Saudi oil shipments amid the disruption of traffic through the Strait of Hormuz.
Inflation fears grow
Rising energy prices are adding to concerns that persistent inflation could force central banks to maintain or increase borrowing costs.
The European Central Bank is widely expected to raise interest rates Thursday, while investors are closely watching the release of US consumer price index data on Friday for clues about whether the Federal Reserve will raise rates at its meeting next week.
“The continuing conflict in the Middle East is keeping concerns over supply disruptions, and that in turn is worrying investors about the inflationary consequences of elevated oil prices,” said Fawad Razaqzada, a market analyst at FOREX.com.
He said resilient US employment and renewed pressure from energy prices represented “hawkish signals” for the Federal Reserve.
“A sustained rise in oil prices would risk reversing the progress on inflation that policymakers have been relying on to justify lower interest rates, while simultaneously squeezing consumers and businesses,” Razaqzada said.
The prospect of higher borrowing costs weighed on equities, with all three major US stock indexes falling on Tuesday.
Asian markets were mixed on Wednesday. Seoul led gains, with chipmaker SK hynix rising more than 3 percent, while Shanghai, Wellington, Taipei, Bangkok and Manila also advanced. Hong Kong, Tokyo, Sydney, Singapore, Mumbai and Jakarta declined.
European markets opened lower, with London’s FTSE 100, Frankfurt’s DAX and Paris’s CAC 40 all falling.
Currency markets
The Japanese yen strengthened against the dollar, trading around 152.95 per dollar after Tuesday’s rally brought it close to its 2026 high before some of those gains were pared.
By around 0715 GMT, the dollar was trading at 153.30 yen, compared with 153.96 yen on Tuesday. The euro rose to $1.1639 from $1.1627, while the pound strengthened to $1.3559 from $1.3541.
Key market figures
- WTI crude: Up 1.4 percent at $94.37 a barrel
- Brent crude: Up 1.6 percent at $99.49 a barrel
- Nikkei 225: Down 0.2 percent at 65,142.78
- Hang Seng: Down 0.3 percent at 25,232.38
- Shanghai Composite: Up 0.3 percent at 3,951.51
- FTSE 100: Down 0.3 percent at 10,775.68
- Dollar/yen: 153.30 yen, down from 153.96
- Euro/dollar: $1.1639, up from $1.1627
- Pound/dollar: $1.3559, up from $1.3541
- Euro/pound: 85.84 pence, down from 85.85 pence
- Dow Jones: Down 1.2 percent at 52,786.07