Oil prices rose above $100 per barrel for the first time since July on Wednesday, driven by renewed fighting between the United States and Iran and fresh attacks on energy facilities in the Middle East.
The surge came after US officials said on Tuesday night that American forces destroyed five Iranian crude oil carriers on September 8. The action followed what the US described as attempted missile attacks on a US navy warship over the past two days.
Markets react to escalating conflict
Traders responded quickly to the rising tensions. The price of Brent crude climbed about 2% on Wednesday morning, briefly topping $100 a barrel, its highest level since late July. It later eased to around $99.50 a barrel.
The latest strikes show that the US-Iran war, now in its seventh month, continues to escalate. That has dampened hopes among investors that a peace deal could be reached this year.
According to Reuters, the jump in prices was also linked to fears over crude shipments through the Red Sea, which has become a key alternative route since traffic through the Strait of Hormuz was severely reduced when the war began on February 28.
Since the conflict started, Brent crude has hit a high of $125 a barrel on April 30.
Saudi attacks and OPEC decision
On Tuesday, Saudi Arabia said attacks by Yemen’s Iran-aligned Houthis on energy facilities in the south of the kingdom caused fires and forced a temporary shutdown of some operations.
Amid the uncertainty, OPEC and its allies agreed on September 6 to pause planned increases in oil production and keep output levels steady for October. The countries involved include Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman.
OPEC said the meeting reviewed current global oil market conditions and the outlook ahead.
Impact in Sierra Leone
For Sierra Leone, the rise in global crude prices is expected to add more pressure on fuel costs. Petrol prices in Freetown have already gone above Le40 per litre, and analysts warn that further increases at the pump are likely if oil stays above $100 a barrel.
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