$105 oil arrives during expanding war by US and Israel against Iran

As Iranian crude oil storage tanks burned following weekend attacks by Israeli warplanes, crude oil prices soared to more than $100 a barrel on Sunday.

Prices in the U.S. hit $105.70 a barrel following a $14.80 or 16.28% jump for West Texas Intermediate crude.

Brent crude, the global benchmark, rose to $106.50 a barrel after a gain of $13.86 or 14.95%.

The last time crude oil prices hit $100 was in June of 2022 and hit $105.76 a barrel in the U.S.

This time, it was the attacks by the U.S. and Israel that continued throughout the weekend. Prices were in the low $90s at the close of Friday’s trading, but over the weekend, the crude oil storage tanks were bombed, sending large plumes of smoke over the cities of Tehran and Karaj where the oil depots are located. Karaj is west of the capital.

Reporters indicated it was raining at the time and the heavy black smoke mixed with the rainfall, creating an oily covering to cars and streets.

Adding to the huge jump in prices is the shutdown of the Strait of Hormuz where nearly 15 million barrels of crude oil, or about 20% of the world’s oil, are shipped every day—–until the start of the attacks and the missile and drone responses by Iran. The strait is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.

Iraq, Kuwait and the UAE have cut their oil production as storage tanks fill due to the reduced ability to export crude. Iran, Israel and the United States also have attacked oil and gas facilities since the war started, exacerbating supply concerns. With the Strait now effectively closed for more than a week, that means about 140 million barrels of oil – equal to about 1.4 days of global demand – has been unable to reach the market.

Natural gas prices also finished up on Friday, although the gain wasn’t as significant as oil prices. Gas finished at $3.172 MMBtu after a gain of 40.169 or 5.63%.

Gasoline and diesel fuel prices rose as well, reaching an average price of $3.45 per gallon in the U.S. and $2.96 in Oklahoma, according to AAA. The U.S. average gained 4 cents since Saturday. Diesel Fuel averaged $4.59, a jump of 3 cents as of Sunday.

Oklahoma’s gasoline price average went up 2 cents from Saturday but 49 cents compared to a week earlier. Another gas reporting service, GasBuddy, showed the lowest gasoline price in the state was $2.25 in Elk City. Oklahoma City’s lowest price was $2.29 while Tulsa’s was $2.69 per gallon.

Oklahoma energy stocks recorded more losses than gains on Friday. Some were significant such as the 17% decline for Mammoth Energy Services.

Gains were moderate for those firms with advances in the value of their shares.