Crude oil prices climbed above $100 a barrel on Sunday for the first time in nearly four years, driven by concerns that the escalating conflict in the Middle East could trigger prolonged supply disruptions. Both West Texas Intermediate (WTI) and Brent crude surged more than 15 percent, reaching levels not seen since the early months of Russia’s 2022 invasion of Ukraine.
Donald Trump, the US President, downplayed the spike, describing it as a “small price to pay” to neutralize Iran’s nuclear threat. Writing on social media Sunday evening, he insisted that the rise in oil prices would be temporary.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” he stated. “ONLY FOOLS WOULD THINK DIFFERENTLY!”
Maritime traffic through the Strait of Hormuz, a critical chokepoint for nearly 20 percent of global crude and gas shipments, has largely stalled since the conflict began on February 28. Gulf oil and gas producers have scaled back output, and Israeli strikes on fuel depots in Tehran have raised fears of retaliatory attacks on infrastructure in neighboring countries.
Rising crude prices have already pushed up gasoline costs in the United States, a politically sensitive issue ahead of the midterm elections in November.
Earlier on Sunday, US Energy Secretary Chris Wright described the disruptions as temporary. He told CNN that the worst-case scenario would last “a few weeks, not months,” and reassured that global oil supplies remain sufficient. Speaking to CBS, he added, “There’s no energy shortage in all of the Western hemisphere.”
Wright noted that the US is coordinating with shipping companies to safely navigate vessels out of the Gulf, adding that early shipments might require “direct protection by the US military” but expected traffic to normalize “relatively soon.”
US Energy Information Administration estimates that Iran produces about four percent of the world’s oil. Although international sanctions limit its exports, some oil continues to flow, primarily to China.
Meanwhile, US Treasury Secretary Scott Bessent indicated that Washington is considering easing restrictions on additional Russian oil, following a temporary approval allowing India to import from Russia. The US International Development Finance Corporation also announced plans for a $20 billion reinsurance mechanism to mitigate risks associated with shipping through the Strait of Hormuz.
