Oil hits $100 per barrel for first time since July 2022

Oil continued its recent rise on Sunday, reaching $100 a barrel for the first time since July 2022, as the ripple effects of the US war against Iran continued to hit global markets.

U.S. crude oil futures rose 20% to nearly $109 a barrel, while Brent, the international benchmark, jumped more than 15% to $107 a barrel.

In addition to the rise in oil, S&P 500 futures fell 1.5%, Dow futures fell 900 points and Nasdaq 100 futures slipped 1.2%, indicating that U.S. stocks were poised to continue last week’s decline.

Oil rose again after a record 35% jump last week. In addition to the surge in oil prices, U.S. retail gas prices have also climbed to a national average of more than $3.45 per gallon.

The last time oil and gas prices reached such levels was immediately after Russia’s invasion of Ukraine in February 2022.

The sale was not limited to American markets.

Japan’s Nikkei 225 and South Korea’s Kospi indexes plunged more than 6% and Australia’s ASX 200 fell almost 4%.

European futures also indicated a sharp decline in trading. Germany’s DAX index is expected to fall almost 3%, Britain’s FTSE 100 is expected to fall 2.5% and the pan-European Stoxx 600 index is expected to fall 2%.

The war continues to hit oil infrastructure and push refiners to reduce production. Kuwait’s state oil company said it was reducing production, while the UAE’s state oil company said it was “managing” some of its production, hinting at possible production cuts.

Kuwait and the United Arab Emirates are both among the top five oil-producing countries in OPEC. Iraq, OPEC’s second-largest oil producer, has already slashed production last week, according to multiple reports.

The Strait of Hormuz, off southern Iran, remains virtually impassable for most oil and liquefied natural gas tankers as they try to reach the global market.

Each dollar increase in crude oil futures prices generally correlates with an increase of about 2.5 cents in retail gasoline prices.

Consumers have already started to see increased prices at their local gas stations, and at least one analyst predicts prices will rise further. “I now estimate that the probability that the national average will reach $4/gal in the next month is now 80%,” Patrick De Haan, an analyst at GasBuddy, said on X.

De Haan added that he sees an 85% chance that diesel fuel will hit $5 a gallon next week.

This year, the price of U.S. crude oil has soared more than 80% as the Trump administration has ramped up its rhetoric against the Iranian regime, even before striking the country and killing its supreme leader.

President Donald Trump has repeatedly dismissed concerns about rising oil and gas prices since the war began, telling Reuters on Friday that “I have no concerns about that” and adding that prices “will go down very quickly when this is over, and if they go up, they go up, but that’s a lot more important than seeing gas prices go up a little bit.”

Trump said on Truth Social on Sunday that the price hike was “a very small price to pay for the United States and the world, security and peace.”

On Sunday, Senate Minority Leader Chuck Schumer, D-N.Y., suggested that the administration tap the Strategic National Petroleum Reserve.

“The Strategic Petroleum Reserve exists for times exactly like these,” Schumer said in a written statement. “When global wars and crises disrupt energy markets, the United States has the capacity to act, but President Trump and his administration refuse to do so.”

On Friday, Treasury Secretary Scott Bessent said the administration was working with U.S. Central Command to try to get ships through the Strait of Hormuz soon.

The strait, a key artery for moving oil and liquefied natural gas to the global market, has been mostly closed since the United States and Israel first struck Iran on February 28.

Still, Bessent said, it could take “another week or two” for ships to use the waterway normally again, “but we are on the right track to solving this problem.”

Bessent also said in the Fox Business Network interview that the Treasury Department could “roll back sanctions” on Russian oil to “create supply” and lower prices in the meantime.

Interior Secretary Doug Burgum echoed Bessent, saying on Fox News on Sunday that it could be “weeks” before ships pass through the Strait of Hormuz again. Burgum said this was only a “temporary problem.”