Oil over $100 a barrel

The price of Brent crude climbed to over $100 a barrel over the weekend, in its biggest one-day jump since 2020, and up roughly 40 percent from before the war. Prices stabilized a little this morning after reports that the G-7 and the International Energy Agency would discuss the joint release of emergency reserves. Even if the Strait of Hormuz opened tomorrow, which is unlikely, it would take weeks for markets to return to normal. “10 days of Strait of Hormuz disruption = at least 60 days of pain to the energy flow in Asia,” wrote June Goh, a senior oil market analyst at Sparta Commodities. “And I am being optimistic here.” Increasing the cost of energy production and transport affects the cost of producing many other things, which can quickly increase general inflation. The price of oil rising faster than expected will add powerful pressure to wind down the war without truly removing Iran’s radical Islamist regime.