Oil Prices Surge: Brent Hits US$ 100 Amid Middle East Escallation 📈

Global energy markets witnessed a sharp spike on Thursday as intensified conflict in the Middle East fueled fears of prolonged supply disruptions through the Strait of Hormuz. • Price Action: Brent futures jumped 9.28% (up US$ 8.54) to US$ 100.52 per barrel. U.S. WTI crude rose 8.28% to US$ 94.47. • Supply Disruptions: Attacks on oil and transport facilities, including explosive-laden boat strikes on two foreign tankers in Iraqi waters, have heightened security risks. Iran’s military command warned of prices potentially reaching US$ 200 per barrel if regional instability persists. • Emergency Measures: The International Energy Agency (IEA) has agreed to a record release of 400 million barrels of oil (with the U.S. contributing 172 million barrels) to stabilize the market. • Market Outlook: Analysts from ING and Moomoo ANZ note that while IEA reserves provide temporary relief, a sustained price drop is unlikely until oil flows resume through the Strait of Hormuz. Economic Context: For Sri Lanka, rising global oil prices typically exert significant pressure on foreign exchange reserves, increase the cost of thermal power generation, and impact the transportation sector.