BANGKOK — Brent crude oil, the global benchmark, surged past $100 a barrel early Thursday, marking another volatile turn in energy markets amid escalating tensions in the Middle East. The spike comes just days after prices briefly touched near $120, sending ripples through financial hubs worldwide and heightening fears of broader economic fallout from the ongoing conflict with Iran.
The latest jump, exceeding 9% in a single session, was triggered by reports of intensified Iranian attacks on commercial shipping near the Strait of Hormuz, a critical chokepoint for global oil flows. According to market analysts, these strikes have disrupted cargo traffic through the strait, which handles about one-fifth of the world's traded oil, exacerbating supply shortages and driving up costs for importers everywhere.
The conflict, which erupted 12 days ago, has seen Iran target oil fields and refineries in Gulf Arab nations as part of a strategy to inflict economic pressure on the United States and Israel. Officials in Tehran have framed the actions as a response to what they call aggressive policies, though no immediate signs of de-escalation have emerged. Iranian state media reported the attacks as successful in halting key shipments, while U.S. military sources described them as a dangerous escalation that threatens regional stability.
In Washington, the White House announced plans to tap into the Strategic Petroleum Reserve, releasing 172 million barrels of oil next week to help stabilize domestic prices. "This release will provide immediate relief to American families facing higher costs at the pump," a spokesperson for the Department of Energy said in a statement issued late Wednesday.
Internationally, the International Energy Agency (IEA) took decisive action on Wednesday, agreeing to unleash 400 million barrels from emergency stockpiles held by member countries — the largest such release in the agency's history. The move followed an emergency meeting of energy ministers from the Group of Seven nations — including Canada, the United States, France, Italy, Japan, Germany, and Britain — held in Paris earlier this week. "We are committed to mitigating the impacts of this crisis on global energy security," IEA Executive Director Fatih Birol stated during a press briefing after the decision.
Despite these interventions, traders remain wary, with speculation mounting that prices could climb even higher if the disruptions persist. The U.S. benchmark West Texas Intermediate crude also rose sharply, settling around $95 a barrel by midday trading in New York. Energy experts warn that prolonged blockages in the Strait of Hormuz could lead to sustained supply constraints, reminiscent of past geopolitical crises but on a potentially larger scale.
Financial markets reacted swiftly to the news, with Asian exchanges opening lower Thursday. Tokyo's Nikkei 225 index fell 1.5% to 54,177.15, while South Korea's Kospi dropped 1% to 5,552.01. Hong Kong's Hang Seng index shed 1.2% to 25,577.71, and Australia's S&P/ASX 200 declined 1.6% to 8,601.70. The Shanghai Composite managed a smaller loss of 0.5%, closing at 4,110.20.
Across the Pacific, U.S. stock futures pointed to further declines, slipping more than 1% in pre-market trading. The dollar strengthened against major currencies, reaching 159 Japanese yen, while the euro weakened to $1.1538. On Wednesday, Wall Street had ended with mixed results: the S&P 500 dipped 0.1% to 6,775.80, the Dow Jones Industrial Average fell 0.6% to 47,417.27, and the Nasdaq Composite eked out a 0.1% gain to 22,716.13.
Since the war's onset in late February 2026, oil price swings have dominated market sentiment, often shifting dramatically within hours. The commodity's brief peak this week — the highest since 2022 — stems from fears that Middle Eastern production could remain curtailed for months, fueling concerns over a potential inflation resurgence. A government report released Wednesday indicated that U.S. consumer prices for essentials like groceries and gasoline rose 2.4% in February compared to the previous year, matching January's pace but surpassing economists' expectations of 2.5%.
That figure, however, predates the current gasoline price surge tied to the conflict, leaving analysts to predict even steeper increases in the coming months. Inflation remains above the Federal Reserve's 2% target, and combined with softening economic indicators, it has revived specters of stagflation — a toxic mix of high prices and stagnant growth that plagued the 1970s. Recent data showed U.S. hiring slowing, with employers adding fewer jobs than anticipated in February, adding to the unease.
Federal Reserve officials have yet to comment directly on the oil shock, but market traders have adjusted their forecasts, delaying expectations for interest rate cuts. Lower rates could stimulate the economy and job market but risk stoking inflation further. President Donald Trump, whose administration is navigating the crisis, has publicly urged the Fed to act swiftly. In a series of posts on social media this week, Trump wrote, "The Fed must cut rates NOW to protect American workers from this disaster caused by endless wars."
The broader economic context underscores the stakes. Gulf oil producers, including Saudi Arabia and the United Arab Emirates, have ramped up output in recent years to offset potential disruptions, but the scale of Iran's campaign has tested those buffers. Shipping companies rerouting vessels around Africa to avoid the strait face weeks of delays and higher insurance premiums, compounding costs for global trade.
Environmental groups have raised alarms about the attacks' ecological toll, with reports of oil spills from damaged tankers threatening marine life in the Persian Gulf. "This isn't just an economic issue; it's a humanitarian and environmental catastrophe in the making," said a representative from Greenpeace International in a statement Thursday.
As diplomatic efforts intensify, world leaders are scrambling to broker a ceasefire. U.N. Secretary-General António Guterres called for urgent talks in a speech Wednesday, emphasizing that "escalation benefits no one and endangers us all." Yet with Iran vowing to continue its operations until its demands are met, and U.S. and Israeli forces bolstering defenses, the path to resolution remains unclear.
Looking ahead, the oil market's trajectory will likely hinge on the conflict's duration. If supply lines reopen soon, prices could ease, offering some respite to consumers worldwide. But persistent uncertainty points to a challenging period for the global economy, one where energy security and geopolitical stability are more intertwined than ever.