Key facts
- Crude oil prices have surged past $108 a barrel.
- West Texas Intermediate (WTI) crude jumped 18% to above $108 a barrel.
- Brent crude added 16% to $107 a barrel.
- Escalating war risks in the Middle East and threatened blockades in the Red Sea are contributing to the price increase.
- US oil prices started the year below $60 a barrel.
Crude oil prices have surged past $108 a barrel, with West Texas Intermediate (WTI) jumping 18% and Brent crude adding 16%, driven by intensifying war risks in the Middle East and threats of blockades in the Red Sea. This significant increase, from below $60 a barrel at the start of the year, is poised to exert upward pressure on global inflation and potentially slow down the global economy. The developments have caused a massive increase in oil prices, with Brent crude futures reaching $107 a barrel and WTI crude futures hitting $108 a barrel. The current limited supply situation is also evident in the physical market, with Brent's three-month timespread reaching its highest level since May 22. Experts have expressed concerns over the unprecedented surge in oil prices, noting the dual-strait worry with the Bab el-Mandeb Strait potentially joining the Strait of Hormuz as a hot spot. Tanker diversions due to Houthi threats could further pressure the physical market and Saudi exports, contributing to the price increase.