Oil prices soar past $100 a barrel as war escalates in Iran

 

The price of oil surged past $100 per barrel on Sunday, the first time it crossed that mark since Russia’s 2022 invasion of Ukraine.

President Donald Trump, in a social media post, called surging oil costs a “very small price to pay.”

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!” Trump posted Sunday on Truth Social.

Oil futures and gasoline prices have skyrocketed as traders worry that the war in Iran would lead to prolonged restrictions on the flow of oil around the globe – particularly as the war has spread to other countries in the Middle East, including attacks on nearby refineries in the oil-rich region.

Iran has threatened to attack any oil tanker passing through the Strait of Hormuz, through which 20% of the world’s oil transits.

US oil futures rose 18% to about $108 a barrel, their highest level since July 19, 2022. US crude briefly hit $110 a barrel Sunday evening.

Brent futures, the global benchmark, increased 16%, near $108 a barrel.

Oil could rise to $150 a barrel by the end of March if travel through the strait doesn’t start flowing again, said Homayoun Falakshahi, lead crude research analyst at Kpler.

Surging oil prices have weighed heavily on stocks in recent days, as traders fear that a prolonged spike in fuel prices could lead to another spike in inflation and hurt the economy. Dow futures dropped more than 800 points, or 1.7%. S&P 500 and Nasdaq futures fell 1.6%.

Triggered by the shock of the initial February 28 strikes in Iran, the average price of gasoline in America reached $3.45 a gallon on Sunday, up 16% from the week prior, according to AAA.

A prolonged spike in oil and gas prices could exacerbate America’s struggles with affordability, putting Trump and Republicans in a precarious political position ahead of this year’s midterm elections.