NEW DELHI: Global crude oil prices have surged to their highest level in more than five months, with Brent crude rising above $114 a barrel, as escalating tensions in the Middle East trigger fresh concerns over supplies.
The latest rally followed Houthi attacks on Saudi targets, including energy infrastructure, while heightened tensions around the Strait of Hormuz have increased fears of disruptions to one of the world’s key oil-shipping routes.
Markets are also reacting to uncertainty over possible further military escalation involving Iran. Although oil continues to flow from the Gulf, investors are pricing in the risk of prolonged disruption to production and transportation.
Declining US crude inventories and disruptions affecting supplies from Libya have added to the upward pressure.
The sustained rise threatens to push up fuel, transport and food costs, adding to inflationary pressures worldwide, particularly in oil-importing economies.