Crude oil prices climbed above $100 a barrel on Sunday as the war involving Iran continued to disrupt energy production and shipping routes across the Middle East, raising fresh concerns about inflation, consumer costs, and the broader global economy.
Brent crude, the international benchmark, rose to $107.97 after trading resumed, up sharply from its Friday close of $92.69. West Texas Intermediate, the main U.S. benchmark, was selling at about $106.22 a barrel, also posting a steep jump from the previous session. The move pushed both benchmarks above the $100 mark for the first time in more than three and a half years.
The latest surge followed an already volatile week in energy markets. U.S. crude had gained 36% over the previous week, while Brent was up 28%, as traders reacted to the growing risk that the conflict could spread deeper into one of the world’s most important oil-producing regions.
At the center of the disruption is the Strait of Hormuz, one of the most critical chokepoints in global energy trade. About 15 million barrels of crude oil, roughly one-fifth of the world’s daily supply, typically move through the narrow waterway each day. But threats of Iranian missile and drone attacks have effectively halted tanker traffic through the strait, sharply limiting the flow of oil and gas from producers including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.
The reduced movement of crude has already begun affecting production decisions. Iraq, Kuwait, and the UAE have cut output as storage facilities fill up amid export constraints. At the same time, attacks on oil and gas infrastructure involving Iran, Israel, and the United States have deepened concerns over supply.
The market reaction has quickly spread beyond crude.
In the United States, the average price of regular gasoline rose to $3.45 a gallon on Sunday, about 47 cents higher than a week earlier. Diesel climbed to roughly $4.60 a gallon, up about 83 cents over the same period. The increases are likely to be closely watched in California and the Bay Area, where fuel prices often run above the national average and swings in global oil markets can translate into sharper pain at the pump.
Rising energy costs are also adding to broader economic anxiety. Analysts have warned that sustained oil prices above $100 a barrel could place new strain on the global economy, particularly if higher fuel and shipping costs feed into consumer prices and weaken spending. In the United States, consumer spending remains a major driver of economic activity, making any prolonged energy shock especially significant.
Financial markets were already showing signs of strain. U.S. stock index futures fell late Sunday, pointing to a lower open on Wall Street. Futures tied to the S&P 500 were down 1.6%, Dow futures fell 1.8%, and Nasdaq futures dropped 1.5%. That came after a difficult finish Friday, when the S&P 500 fell 1.3%, the Dow briefly sank by as many as 945 points before recovering somewhat, and the Nasdaq dropped 1.6%.
Iran’s own exports are also part of the equation. The country ships about 1.6 million barrels of oil a day, much of it to China. Any sustained disruption to that supply could force major buyers to look elsewhere, increasing competition for available barrels and putting further upward pressure on prices.
Natural gas prices have also risen during the conflict, though less dramatically than oil. Late Sunday, natural gas was selling for about $3.33 per 1,000 cubic feet, up from Friday’s close of $3.19 after an 11% gain over the previous week.
For now, energy markets remain highly sensitive to any sign that the conflict could either ease or intensify. But with shipping through the Strait of Hormuz severely constrained and regional production already affected, traders are increasingly pricing in the possibility that the disruption may not end quickly. If that continues, the consequences could extend far beyond oil markets, reaching households, businesses, and financial systems around the world.
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