Oil hits $100 a barrel for first time in months as Middle East conflict intensifies again

The price of oil breached the $100 threshold on Wednesday for the first time in months, as new flare-ups in the United States’ war with Iran stoked fresh concern for global energy markets.

The spike came a day after the U.S. military said it destroyed five Iranian tankers in response to attempted missile attacks on a Navy warship. Tehran responded with attacks on U.S. ships and a base in Jordan, the latest bout of fighting in a conflict that remains unresolved after months of disruption.

Elsewhere new attacks by a Tehran-backed rebel group set oil facilities ablaze in Saudi Arabia and threatened a significant new escalation in that conflict.

The international benchmark, Brent crude, rose above the symbolic $100 mark at a little after 3 a.m. ET, before seesawing above and below that level through the early morning.

While about 40 percent higher than pre-war levels, Brent was still below the peak of $120 in the early days of the war.

The U.S. benchmark, West Texas Intermediate Crude, is also up by similar levels, at around $95 a barrel.

Those prices are of significant concern to the White House and Republicans ahead of the Midterm elections, with consumers facing higher prices as a result.

Gas prices rose to $4.22 on Wednesday, the highest since early June.

Oil exports from the Middle East have dwindled since the U.S. and Israel launched their war against Iran in February. A fifth of the world’s oil supply had flowed through the Strait of Hormuz, the key waterway that has been throttled by Tehran in response.

While the U.S. military has managed to restore some shipping traffic through Hormuz, other key trade routes have also faced disruption.

The Iran-backed Houthi rebels in Yemen have attacked tankers in the Red Sea. This week the group launched attacks on Saudi energy facilities that set oil sites ablaze and threatened a significant expansion of their conflict with the key U.S. ally.

President Donald Trump claimed on social media Monday that “oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran.”

He said that prices could fall to as low as “two dollars a gallon.”

There was little sign of that, or of a resolution to the war.

Trump has shifted to a strategy of squeezing the Iranian economy with the U.S. maritime blockade, but recent days have seen a number of violent flare-ups.