Oil Prices Hit $100, Reminding Everyone That Peace Is Bad for Business
Oil hits $100 as Middle East chaos provides a convenient excuse for price hikes, because nothing says 'stable energy market' like burning tankers and failed ceasefires.
Oil prices have once again crashed the $100-a-barrel party, hitting that milestone for the first time since May, as escalating hostilities in the Middle East remind global markets that conflict is terrible for humanity but great for energy speculation.
Brent crude, the global benchmark for oil prices, surged more than 5% on Thursday following several days of increases, after the US stepped up military strikes against Iran. Because nothing says 'stable energy supply' like airstrikes.
Prices spiked after Houthi militia attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has been using to bypass the Strait of Hormuz - essentially turning the region into a high-stakes game of maritime Frogger.
Gas prices have also been on a steady upward climb over the past month. The benchmark UK gas price currently sits at around 150p per therm, up from roughly 98p per therm on 26 June. That's a 53% increase, which is definitely not what your heating bill wanted to hear.
On Thursday, Iran's Islamic Revolutionary Guards Corps announced that three tankers had abandoned an attempt to pass through Hormuz after an explosion aboard one of them caused it to catch fire. The Strait of Hormuz, as you may recall, is the narrow waterway through which about 20% of the world's oil passes - so this is fine, everything is fine.
A temporary ceasefire between the US and Iran has apparently fallen apart, and this week US Secretary of State Marco Rubio noted that the people in charge in Iran were 'not ready to make a deal.' In other words, the diplomatic equivalent of 'it's not you, it's us - actually, it's definitely you.'
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