Oil Prices Reach $100 Per Barrel
For the first time since May, oil prices reached $100 a barrel as concerns about the world’s energy supplies were rekindled by the Middle East’s intensifying turmoil.
The worldwide benchmark for oil prices, Brent crude, increased by more than 6% on Thursday after rising over the previous few days as the US increased its military attacks against Iran.
After the Houthi militia in Yemen attacked oil ships in the Red Sea, endangering a vital export route that Saudi Arabia has used to avoid the Strait of Hormuz, prices surged.
The standard UK gas price is currently at over 150 per therm, up from about 98p at the end of June. Gas prices have also increased substantially over the previous month.
After a brief ceasefire, oil prices had started declining.
Middle East Conflict Drives Oil Surge
Following a brief ceasefire between the United States and Iran, oil prices had been declining.
They returned to levels last observed prior to the start of military action against Iran on February 28 by the US and Israel.
The ceasefire has failed, though, and US Secretary of State Marco Rubio stated last week that Iran’s ruling class was “not ready to make a deal”.
Higher Fuel Costs Push Inflation Risks
Consumer costs may rise as a result of the ongoing battle in numerous nations, including the US and the UK.
Petrol and fuel usually get more costly as oil prices rise.
Although drivers are directly impacted, households may also see an increase in the cost of other commodities, such food, as a result of businesses passing on increased transportation expenses to consumers.
Red Sea Attacks Raise Supply Fears
Due to a slowdown in the price of gasoline and diesel, inflation has decreased in the US to 3.5% and in the UK to 2.6% in the year ending in June.
However, given the ongoing crisis in the Middle East, it is still unclear whether the slowdown would last.
UK petrol prices have increased by 5p per litre since the start of July, reaching over £1.56, according to new figures released on Thursday.
The RAC reports that the average price of diesel is £1.72 per liter.
According to the motorist advocacy group AAA, average gas prices in the US have once again above $4 per gallon, up from $3.92 a month ago.
