Oil Hits $100 Amid Middle East Attacks, Global Markets Slide

Oil prices surged above $100 per barrel as renewed Iranian attacks on energy infrastructure in the Middle East threatened global supply, overshadowing a record 400-million-barrel release from the International Energy Agency’s reserves. The disruptions prompted output cuts, flight cancellations, higher fuel surcharges, and declines in global stock markets, raising fears of renewed inflation and economic instability.

Oil prices surged above $100 per barrel on Thursday, driven by renewed Iranian attacks targeting energy infrastructure in the Middle East, which heightened fears of global supply disruptions and overshadowed a record release of crude from strategic reserves by the International Energy Agency (IEA). On Wednesday, the IEA announced that its member countries had agreed to release 400 million barrels of oil, marking the largest coordinated release in the agency’s history. However, the measure did little to calm markets, as concerns over the stability of energy supplies persisted, particularly with the Strait of Hormuz—a crucial shipping route for roughly one-fifth of the world’s crude—effectively closed amid escalating tensions.
The crisis intensified with multiple attacks across the region. In Iraqi waters, two tankers were reportedly struck, while Baghdad had already announced plans to cut oil production due to the disruptions. Similar output reductions were planned by Kuwait and Saudi Arabia. Bahrain reported an attack on fuel storage tanks, Saudi Arabia intercepted drones aimed at its Shaybah oil field, and Oman suspended operations at the Salalah port after drones struck fuel tanks there. Additionally, the United Kingdom Maritime Trade Operations agency issued an alert stating that a container ship near the United Arab Emirates had been hit by an “unknown projectile,” highlighting the growing risks to commercial shipping in the region.
Brent crude reached a high of $101.59 per barrel, while West Texas Intermediate (WTI) climbed to nearly $96. Both benchmarks had previously spiked as much as 30 percent on Monday, approaching $120 per barrel, before trimming some of those gains. The sharp increase in oil prices had immediate operational and economic consequences. Air New Zealand announced the cancellation of approximately 1,100 flights over the next two months, while Cathay Pacific in Hong Kong imposed new fuel surcharges roughly double the existing rates. In response to potential domestic fuel shortages, New Zealand’s government stated it was considering invoking emergency laws restricting vehicle use, and Australian authorities temporarily relaxed fuel quality standards to allow higher sulphur content, which is expected to release about 100 million liters of fuel into the local market.
The surge in crude prices has reignited concerns over global inflation and the potential need for central banks to raise interest rates, after many had been considering rate cuts just last month. The heightened geopolitical and economic uncertainty weighed on equity markets worldwide. Major Asian indices—including the Nikkei 225 in Tokyo, Hang Seng in Hong Kong, Shanghai Composite, and other markets in Sydney, Seoul, Mumbai, Wellington, Singapore, Taipei, Manila, and Jakarta—all closed lower. European markets, including London, Paris, and Frankfurt, opened in the red, reflecting widespread investor caution.
Market analysts highlighted that the IEA’s release of emergency oil reserves, while historically significant, was unlikely to fully offset market fears given the ongoing geopolitical risks. Stephen Innes of SPI Asset Management described the move as largely symbolic, stating that “when the geopolitical fire alarm is still ringing around the Strait of Hormuz, dumping barrels from emergency stockpiles is less a solution than a symbolic gesture.” He added that the release might temporarily reduce volatility but cannot mitigate the risk posed by threats to one of the world’s most important shipping arteries.
In the United States, former President Donald Trump asserted that recent strikes had substantially weakened Iran, declaring to reporters that “they are pretty much at the end of the line” and asserting, “We’ve won. We won — in the first hour it was over.” Meanwhile, Israel’s military indicated that operations were far from complete, stating it still had a “broad bank of targets” in the region.
As of early Thursday trading, oil prices remained elevated, with WTI at $90.72 per barrel and Brent North Sea crude at $96.04. Global stock markets reflected investor caution: Japan’s Nikkei 225 fell 1.0 percent to 54,452.96, Hong Kong’s Hang Seng dropped 0.7 percent to 25,716.76, and Shanghai’s Composite slipped 0.1 percent to 4,129.10. European equities also showed declines, with London’s FTSE 100 down 0.6 percent at 10,296.02. In the United States, the Dow Jones Industrial Average closed 0.6 percent lower at 47,417.27. Currency markets mirrored the cautious sentiment, with the euro trading at $1.1542, the pound at $1.3379, and the US dollar at 158.89 yen.
The combination of heightened geopolitical tensions, attacks on energy infrastructure, and the potential for disrupted global oil supply has created uncertainty across financial markets, leading to elevated crude prices, falling equities, and continued concern about rising inflation and economic stability worldwide.