Oil holds above $100 as Iran-US attacks threaten deeper supply disruption

Oil prices surged above $100 a barrel on Thursday, with Brent crude surpassing $101.30 per barrel amid escalating Iran-US attacks on shipping routes. US West Texas Intermediate also climbed to $96.55. The gains followed Iran's reported attacks on ten ships near the Strait of Hormuz and the US sinking of five Iranian oil tankers. Iran's Revolutionary Guard Corps threatened to intensify its response to further attacks.

The Strait of Hormuz, crucial for global energy markets, remains a focal point. However, oil and gas flows through the strait have significantly decreased from pre-war levels. For much of May, oil prices remained below $100, but concerns over the conflict's escalation pushed them back above that threshold. Prices peaked at $126.41 since the war's onset on February 28, before dipping slightly in late July.

The International Energy Agency predicts a 4% decline in global oil supplies this year, exacerbating supply worries. Fuel prices are already impacted by these disruptions, with US gasoline averaging around $4.22 per gallon and diesel nearing an all-time high of $6. As oil prices remain elevated, this could lead to increased costs for gasoline, diesel, and jet fuel, potentially raising transportation expenses and inflating prices of goods transported by road, air, or sea.