Oil prices surged back above $100 a barrel as escalating attacks on shipping in the Middle East raised fears of a prolonged conflict and disruption to global energy supplies.
Brent crude jumped more than 9% after footage emerged of ships ablaze near a key waterway through which around a fifth of the world’s oil and gas passes.
Markets also signalled expectations of higher prices in the months ahead, with September contracts rising by as much as 5% to more than $86 a barrel.
Jim Reid, an analyst at Deutsche Bank, warned that investors were increasingly pricing in a longer period of disruption.
“With each passing day it gets harder to argue that the disruption to shipping and energy infrastructure will only prove temporary," he told The Telegraph.
The surge came after Iran launched a series of attacks across the region, including striking a container ship off Dubai, causing a blaze near Bahrain’s international airport, targeting a Saudi oil field with a drone and forcing Iraq to halt operations at oil terminals after an attack on the port of Basra.
Prices rose despite the International Energy Agency announcing the release of a record 400 million barrels from global strategic reserves on Wednesday. Brent crude later eased slightly but was still trading at around $98 a barrel this morning.