Global oil prices climbed past $100 per barrel on Sunday for the first time in almost four years, driven by fears that the escalating Middle East conflict could cause long-term disruptions to global energy supplies.
Both major crude benchmarks — West Texas Intermediate (WTI) and Brent — surged by more than 15 percent when markets opened on Sunday evening, reaching levels last seen during the early months of the .
Despite the sharp rise, U.S. President downplayed the spike, describing it as a temporary consequence of efforts to eliminate Iran’s nuclear capabilities.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” he wrote on social media Sunday evening.
“ONLY FOOLS WOULD THINK DIFFERENTLY!”
Concerns have also grown over shipping activities in the , a key maritime route that handles about 20 percent of global crude oil and gas shipments. Traffic through the waterway has largely stalled since the war began on February 28.
At the same time, oil and gas producers across the Gulf region have begun cutting output. Israeli strikes on fuel storage facilities in have also heightened fears that Iran could retaliate by targeting energy infrastructure in neighbouring countries.
The increase in crude prices is already affecting consumers in the , with fuel prices rising at the pump — a politically sensitive issue ahead of the country’s midterm elections scheduled for November.
‘No energy shortage’
Earlier on Sunday, U.S. Energy Secretary suggested the disruptions would likely be brief.
“Worst case, that’s a few weeks. That’s not months,” Wright said in an interview with .
He also told that global supply remains sufficient. “They shouldn’t go much higher than they are here because the world is very well supplied with oil,” he said. “There’s no energy shortage in all of the Western hemisphere.”
Wright further revealed that the U.S. government is in discussions with shipping companies seeking safe passage for vessels currently in the Gulf.
“Early tankers probably will involve some direct protection by the US military” to pass through the , he explained, adding that maritime activity could return to normal “relatively soon.”
Iran currently produces about four percent of the world’s oil supply, according to the . Although the country’s oil industry is under international sanctions, some exports continue, largely to .
Meanwhile, U.S. Treasury Secretary said the government is considering easing sanctions on additional Russian oil supplies. The move comes after was temporarily allowed to purchase oil from as global prices surged.
In a separate development, the announced plans to establish a reinsurance programme worth up to $20 billion to cover risks linked to shipping through the Strait of Hormuz.