Global oil price hits 4-year high on concerns Iran war could worsen

Global oil prices jumped to a four-year high of more than US$126 a barrel on Thursday, on concerns that the US-Iran war could worsen and lead to a protracted Middle East oil supply disruption that could hurt global economic growth.

The market moved higher after Axios, citing unidentified sources, reported late on Wednesday that US President Donald Trump was slated to receive a briefing on Thursday on plans for a series of military strikes on Iran in hopes it would return ‌to negotiations on its nuclear programme.

Global oil benchmark Brent crude futures rose as high as US$126.41 a barrel, the loftiest ⁠since March 9, 2022, but by 1230 GMT (8.30pm Hong Kong time) were down by US$4.13, or 3.5 per cent, to US$113.90. The prompt contract for June delivery expires on Thursday. The more active July contract was at US$108.83, down by US$1.61, or 1.5 per cent.

The price of Brent crude has doubled since the US-Israeli attack on Iran began on February 28 and the US benchmark West Texas Intermediate crude was up around 90 per cent due to the effective closure of the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas transits.

The oil price gains risk a renewed spike global inflation and higher pump prices in the US ahead of midterm elections later this year.

“Oil ⁠prices need little encouragement to tempt them higher at present,” said John Evans of oil broker PVM. “For those who do not think Brent prices have the potential to reach US$150 a barrel, you ought ‌to look away now.”