Oil Nears $100 as Middle East Risks Grow

Oil prices are nearing $100 a barrel as escalating U.S.-Iranian hostilities, attacks on tankers and Saudi energy facilities, and constrained traffic through the Strait of Hormuz threaten supplies. Brent crude rose above $99 in early trading and has gained more than 60% this year, while diesel, other refined products and European natural gas have climbed more sharply. Analysts say the conflict’s greatest impact so far has been on petroleum products, with lower supply, shrinking inventories and heightened shipping risks likely to sustain volatility; further disruption could push oil as high as $150 a barrel, while a cease-fire could trigger a rapid reversal. Economists and strategists warn that persistently high energy costs could intensify inflation, pressure households and businesses, constrain central banks’ policy options and increase the risk of an equity-market correction, although U.K. domestic inflation and wage pressures have so far remained relatively contained. Over the longer term, E3G warns that declining oil demand could create security and financial strains for producer countries unless importers coordinate exit strategies and accelerate the shift to clean energy.