CHICAGO (AP) — Oil prices have fallen below $100 a barrel for the first time in three and a half years as the Iran conflict has disrupted production and shipments in the Middle East.
The price of a barrel of Brent crude, the international standard, was at $101.19 shortly after trading resumed on the Chicago Mercantile Exchange, up 9.2% from Friday’s settlement price of $92.69.
West Texas Intermediate, the light, sweet crude oil produced in the United States, is selling for around $107.06 a barrel. This is 16.2% higher than Friday’s settlement price of $90.90.
Both can rise or fall as the market continues to trade.
The increase followed a 36% rise in US crude and a 28% rise in Brent crude last week. Oil prices have soared as a result of the war, now in its second week, that has trapped countries and places important to the production and movement of oil and gas from the Persian Gulf.
About 15 million barrels of crude oil — about 20% of the world’s oil — are typically shipped through the Strait of Hormuz each day, according to independent research firm Rystad Energy. The threat of Iranian missiles and drone strikes has halted all tanker traffic, which borders Iran in the north, carrying oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
Iraq, Kuwait and the United Arab Emirates have cut their oil production as storage tanks fill up as the ability to export crude is reduced. Iran, Israel and the United States have also attacked oil and gas facilities since the start of the conflict, furthering supply concerns.
The last time US crude futures traded above $100 per barrel was on June 30, 2022, when the price reached $105.76. For Brent, it was July 29, 2022, when the price reached $104 per barrel.
A global surge in oil prices since Israel and the United States attacked Iran on March 1 has rattled financial markets, raising concerns that higher energy costs will fuel inflation and lead to less spending by U.S. consumers, the main engine of the economy.
In the United States, the price of a gallon of regular gasoline rose to $3.45 on Sunday, according to the AAA Motor Club, up about 47 cents from a week ago. Diesel sold for about $4.60 a gallon, up nearly 83 cents on the week.
Natural gas prices have also risen, although not as much as oil. It rose about 11% last week and ended Friday at $3.19 per 1,000 cubic feet.
If oil prices remain above $100 per barrel, some analysts and investors say it will be too much for the global economy.
At the end of last week, the Israeli army targeted oil depots and four oil storage tankers and an oil transfer terminal in Tehran.
