Oil prices surpass 100 dollars a barrel after US strikes on Iranian tankers

Wealth Club chief investment strategist Susannah Streeter expects oil prices to remain high after rising above 100 dollars a barrel for the first time since July.

The price hikes follow the latest round of strikes in the Middle East war, where multiple Iranian tankers had been struck in response to more attempted missile attacks on a Navy warship.

And while investors are hoping that a peace deal can be reached this year, fighting between the US and Iran continues to escalate after more than six months of conflict.

Streeter said: “Brent Crude has raced higher, hitting $100 for the first time since July, after Iran ratcheted up its offensive on the US and its allies, hitting two American vessels and firing missiles towards Jordan, while threatening crews in ports in Bahrain and Kuwait.

“More oil tankers have been struck, and Houthi rebels have also been attacking Saudi Arabia’s Jazan refinery, heightening supply worries about energy shipments. It comes after the US military targeted infrastructure on the key Iran export hub – Kharg Island.

“While other oil-producing nations have increased production, it’s not enough to offset the disruption wreaked across the Middle East, with prices looking set to stay stubbornly around $100 a barrel.

“Far from showing signs of resolution, the conflict in the Middle East appears to be becoming more entrenched, creating chronic supply concerns around crude and gas, while intensifying trade battles threaten to push up the cost of goods just as central banks are trying to get inflation under control.

“This may be a bonus for energy companies, with Shell and BP rising in early trade, but it’s highly painful for companies and consumers, and puts more pressure on central bankers to raise interest rates.

“Given the sustained impact of higher energy prices, the worry is that firms will have little choice, other than to raise prices, which risks creating another inflationary spiral.”