Crude oil prices have soared past $100 a barrel amid a large-scale and unprovoked US-Israeli war on Iran.
The international benchmark of Brent crude jumped more than 20 percent on Sunday, and at one point hit $115 as concerns increased over prolonged disruptions to global energy supplies.
The benchmark was being traded at around $107.50 as of 0230 GMT on Monday following a slight moderation. The uptick marked the first time oil prices climbed over $100 per barrel since the onset of Russia’s operations in Ukraine in 2022.
US President Donald Trump, who campaigned heavily on cost-of-living concerns in the 2024 vote, sought to downplay the rise in prices.
“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 the USA, and World, Safety and Peace,” Trump asserted in a post on Truth Social.
US Secretary of Energy Chris Wright also tried to brush off the prospect of soaring energy prices earlier on Sunday.
He told CBS News’ Face the Nation program that any increase in prices at the petrol pump would be “temporary.”Crude oil prices have spiked by about 50 percent since the US and Israel launched joint strikes on Iran on February 28.
Iran, in retaliation, has effectively brought shipping in the Strait of Hormuz to halt.
Iraq, the United Arab Emirates and Kuwait — three of the major producers in the Organization of the Petroleum Exporting Countries (OPEC) — have slashed production amid an accumulating backlog of barrels with no destination to go due to the effective closure of the strategic waterway.
Meanwhile, stocks in Asia tumbled drastically on Monday morning, as investors prepared for the fallout of soaring energy prices.
Japan’s 225 index fell more than 7 percent in early trading, while South Korea’s KOSPI plunged more than 8 percent.The Hang Seng Index in Hong Kong also fell by nearly 3 percent.
US stocks futures, which are regularly traded outside of usual market hours, also experienced significant losses.
Futures tied to Wall Street’s benchmark S&P 500 fell by 1.7 percent, while those for the tech-heavy Nasdaq Composite dropped by 1.90 percent.
The International Monetary Fund (IMF) has predicted that energy sustained 10 percent rise in oil prices brings about a 0.5 rise in inflation and a 0.15 percent reduction in global economic growth.
