Oil Prices Surpass $100 Barrel for First Time Since 2022

Crude oil prices rose above $100 a barrel on Monday in early Asian trading after major Middle Eastern producers cut output because of the repercussions of the conflict in the region.

US crude futures rose by more than 20 percent to $111.24 a barrel amid supply concerns as the US-Israeli war on Iran escalates, while the global benchmark Brent crude jumped by as much as $18.35 to reach $111.04 a barrel. The last time oil prices exceeded $100 a barrel was after the start of the Russian military operation in Ukraine in 2022.

US crude rose by about 35 percent last week, recording its biggest gains in the history of futures trading since 1983.

On Saturday, Kuwait, the fifth-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), announced precautionary cuts to its oil production and refinery output because of “Iranian threats to the passage of ships through the Strait of Hormuz.”

Meanwhile, production in Iraq, OPEC’s second-largest oil producer, declined. Output from the three main oil fields in southern Iran also fell by 70 percent to 1.3 million barrels per day.

The United Arab Emirates, OPEC’s third-largest oil producer, announced that it was carefully managing offshore production levels to meet storage requirements.

Meanwhile, European natural gas prices surged sharply by around 30 percent on Monday, amid growing uncertainty in global energy markets and escalating military tensions in the Middle East, raising fears of prolonged supply disruptions.

The Dutch TTF natural gas contract, the main benchmark for European gas prices, surged to nearly 69.50 EUR per megawatt-hour before easing slightly later in trading.

The upsurge comes amid military tensions between the United States and Israel on one side and Iran on the other, which have disrupted shipping through the strategic Strait of Hormuz, a critical passage for a significant portion of global crude oil and LNG shipments, heightening concerns over sustained supply. Despite the sharp increase in European gas prices, current levels remain below the record highs seen in 2022, during the energy crisis triggered by the war in Ukraine, when gas futures soared much higher due to supply shortages.

The surge in European gas prices signals additional pressures on global energy markets at a time when major economies are already grappling with inflation and high energy costs. Analysts warn that continued instability in the Middle East could increase competition for LNG, shift some demand to alternative markets, and make prices more volatile.