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Oil Breaks $100 Barrier
Crude surged above $100 as the war with Iran disrupted flows through the Strait of Hormuz and slowed Middle East production. Gas prices rose about 50 cents in a week to $3.48 a gallon.
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Oil futures jumped 13% Monday, with US crude at $103 and Brent at $105 after nearly reaching $120 overnight. Both benchmarks were on pace for their biggest single-day dollar increase on record.
The shock reflects a near shutdown of tanker traffic through the Strait of Hormuz, which carries 20% of the world’s oil. Producers have also slowed output as storage fills and deliveries stall.
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| “The longer it takes to re-open, the more upward pressure on price. A reinforcing cycle.” |
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Governments are now exploring reserve releases, tanker insurance support, and naval escorts to ease market pressure. Still, analysts say prices could keep climbing without a compelling solution to the strait’s closure.
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Why This Matters
- The move shows how quickly shipping disruption can hit global energy prices.
- Higher crude is already feeding through to US gasoline costs.
- Market pressure is rising on policymakers to restore traffic through the strait.
What’s Next
- G7 finance ministers are expected to discuss a joint oil reserve release.
- Shipping activity will likely remain the key signal for where prices go next.
- Analysts say oil could rise further if Hormuz traffic does not improve by late March.
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