By Agencies
Global oil prices surged into the triple digits as the war continued to disrupt shipping and energy infrastructure in the Middle East.
The price of Brent crude oil, the global benchmark, briefly neared $120 a barrel in early trading Monday, amid fears the conflict could keep tankers sidelined and supplies constrained. Crude oil last traded at above $100 a barrel in 2022, after Russia invaded Ukraine. It had dropped below $90 by Monday afternoon.
The move had been building for days. Before the war broke out, crude was trading at $70 a barrel. Prices then jumped to just over $80 the middle of last week. Then the price hikes began to accelerate, closing at nearly $93 on Friday.
Trump said Monday the U.S. is offering political risk insurance to tankers operating in the gulf near Iran. He said U.S. forces would escort oil ships through the area if necessary.
“We’re also focused on keeping energy and oil flowing to the world, and I will not allow a terrorist regime to hold the world hostage and attempt to stop the globe’s oil supply,” he said.
The president said the U.S. won’t be as affected by disruptions to oil supply chains,though U.S. gas prices have spiked in recent days.
“We have so much oil. We have tremendous oil and gas, much more than we need,” he said.
He said he knew oil prices would go up in the U.S. after the attack on Iran, but that they haven’t gone up as much as he anticipated.
The average gasoline price in the U.S. has already jumped about 50 cents a gallon in a week, from just under $2.98 to $3.45, according to AAA. Patrick De Haan, the petroleum analyst for the app GasBuddy, says gasoline is likely to hit a $4 national average this week.
Rebecca Babin, an energy trader with CIBC Private Wealth, said Friday,”We have gone from traders with ice in their veins to traders with panic in their veins.”
The surge has also rattled financial markets in Asia. Japan’s Nikkei fell more than 5% Monday as oil prices rose.
