Global oil price nears 2026 peak at US$117 per barrel
OIL prices rose further Friday, as hostilities across the Middle East continue to raise fears in the energy markets that the oil supply from the region would remain throttled.
The price of Brent crude, the international oil benchmark, jumped above US$117 a barrel Friday, taking its increase for the week to almost six per cent.
Brent prices have risen 60 per cent since the United States and Israel launched attacks on Iran on Feb. 28, and are now at their highest level since April and close to their highest levels since the war began.
WTI, the U.S. benchmark, topped US$102 a barrel Friday, up more than 50 per cent since the start of the war.
The jump in oil prices has pushed energy costs higher for Americans, with the national average price of gasoline rising to US$4.29 a gallon Friday, according to AAA motor club. The price is just below its peak in May of $4.55 and still more than 40 per cent higher since the war began. Diesel prices also nudged higher Friday, to US$6.31 a gallon, still close to their peak in September of US$6.51.
Investors have grown increasingly wary over the Trump administration's war in Iran, discounting the likelihood that the conflict will be resolved soon.
The price of Brent is expected to remain above US$100 through April, according to futures contracts Friday.
Attacks have escalated in the Middle East, particularly on ships in the Strait of Hormuz, the vital waterway through which roughly a fifth of the world's oil supply was shipped before the war. The Iran-backed Houthi militia attacked an airport in Saudi Arabia this week, killing two people and prompting the United States to withdraw some diplomatic staff.
Strikes on energy vessels in the Middle East this month are at the highest level since the war began, based on data from Deutsche Bank.
The conflict has drastically slowed oil supplies leaving the region. Oil shipments recovered somewhat in September but slumped again this month.
The rise in oil prices appeared to weigh on the stock market. The S&P 500 fell 0.5 per cent on Friday, adding to losses the day before that were driven by a sell-off in tech shares.
Investors are also grappling with the uncertainty of what may come in the months ahead and the prospect of oil prices remaining elevated for longer than previously thought.
The U.S. and Israeli militaries have reportedly developed plans to attack Iran after the U.S. midterm elections.
— New York Times