By Francis Ajuonuma, with additional report
Global oil prices surged on Thursday, briefly crossing $100 per barrel.
This came as stock markets around the world extended losses amid renewed attacks on energy targets in the Gulf, deepening fears of a major supply shock.
The spike came despite a massive intervention by major economies after the International Energy Agency (IEA) announced the release of 400 million barrels of crude from strategic reserves, the largest coordinated release in history.
The agency warned that the escalating conflict in the Middle East was already disrupting global supplies on an unprecedented scale.
“The Mideast war is creating the largest supply disruption in the history of the global oil market,” the IEA said in its latest market report.
However, the release of emergency reserves failed to calm markets as tensions intensified around the Strait of Hormuz, a vital shipping route through which roughly one-fifth of global crude oil supply passes.
Iranian retaliatory strikes targeting vessels and Gulf infrastructure have effectively shut down traffic through the strait, triggering panic in global energy markets.
Security incidents escalated further when two oil tankers were attacked off the coast of Iraq, killing at least one crew member, while another cargo vessel caught fire after being struck by shrapnel.
According to the IEA, the disruption has already cut at least 8 million barrels of crude oil per day from global supply, with an additional 2 million barrels of petroleum products affected — roughly 7.5 per cent of total global daily production.
The international oil benchmark Brent crude climbed as high as $101.59 per barrel during trading before briefly retreating.
Prices soon surged again after US President Donald Trump said preventing Iran from obtaining nuclear weapons remained a bigger priority than stabilising oil markets.
Energy analysts say geopolitical risks are now dominating market sentiment.
“Energy markets have been rattled by news of Iranian attacks on shipping in the Persian Gulf, along with missiles aimed at countries across the region,” said Trade Nation analyst David Morrison.
He added that Washington’s struggle to secure safe passage for ships through the Strait of Hormuz was raising new concerns.
“The US’s inability to reopen the Strait of Hormuz and provide security for the shipping passing through suggests there are limits to their dominance,” Morrison said.
At current levels, Brent crude has jumped about 38 per cent since the conflict erupted 13 days ago following joint US and Israeli airstrikes on Iran.
The emergency release of crude from strategic reserves — roughly equivalent to 20 days of oil shipments that normally pass through the Strait of Hormuz — has so far failed to stabilise markets.
“If the announcements of the release of oil from strategic reserves were supposed to cap prices, then they failed dismally,” Morrison noted.
The sharp rise in energy prices is already hitting the aviation sector.
New Zealand’s national airline announced it would cancel about 1,100 flights over the next two months, citing rising fuel costs.
Meanwhile, Cathay Pacific introduced new jet fuel surcharges on most routes, while Air France-KLM confirmed it had begun increasing ticket prices.
Analysts warn that prolonged high oil prices could have severe consequences for the global economy.
“The longer the oil price remains elevated, the more damaging and long-lasting the inflation shock will be for the global economy,” said Kathleen Brooks, research director at trading group XTB.
Financial markets reacted sharply to the developments.
On Wall Street, major indices opened lower, with the Dow Jones Industrial Average dropping by more than 1%.
European stocks also traded lower in the afternoon, while most Asian markets closed in the red.
The US dollar strengthened against major currencies, driven by investors seeking safer assets amid rising geopolitical risks.
“The dollar has strengthened, driven by safe-haven demand, fears of inflation and expectations that interest rates will stay higher for longer,” said Victoria Scholar, head of investment at Interactive Investor.
