$100.94 was the price of Brent crude, the world's oil benchmark, shortly before 9 a.m. on Wednesday (9), up 3.08%, according to G1, the news portal of Brazil's Globo group. It was the first time oil climbed back above three digits since May 25. The level matters for household budgets: G1 projects that the rally will push energy costs higher and pressure global inflation, which keeps fuel expensive and interest rates elevated for longer.
Since a barrel holds 159 liters (about 42 gallons), at $100.94 the raw oil costs more than 63 cents a liter before refining, shipping and taxes. West Texas Intermediate, the grade used as the benchmark in the United States, rose 2.79% to $95.63 at the same time. The newspaper Folha de S.Paulo reports that the day's peak came at 6:45 a.m., when Brent touched $100.95, its highest since May 22, when it cost $102.77.
Why prices jumped
The war between the United States and Iran is now six months old and took two escalatory turns this week. According to G1, attacks by the Houthis, an Iran-backed group, hit Saudi energy installations and set fire to structures tied to oil production; Saudi Arabia's Energy Ministry said facilities in the south had suspended operations and that "the competent authorities are dealing with the repercussions of the attacks". On Tuesday (8), the United States destroyed five Iranian tankers linked to the Revolutionary Guard, and Iran answered on Wednesday saying it had attacked ten ships and fired ballistic missiles at a U.S. base in Jordan, Folha reports.
In short: the Strait of Hormuz is the narrow channel between Iran and Oman that carried about 20% of the oil traded worldwide before the war. In the week ending August 30, between 8 million and 9 million barrels a day crossed the strait, double the previous week, according to Rystad Energy chief economist Claudio Galimberti, in figures released by Reuters. That flow has now fallen to fewer than 2 million barrels a day, less than a quarter of the volume of two weeks ago, and Houthi attacks also threaten shipments through the Red Sea, which had become an alternative route to the strait.
What it means for wallets
Major banks have already reacted: Goldman Sachs, Bank of America and HSBC raised their oil price forecasts, according to G1. The International Energy Agency (IEA), which groups oil-consuming countries, expects global supply to fall by 4.3 million barrels a day this year, about 4% of the total, even as the United States, Canada and Guyana pump more. Less oil for sale and higher prices feed inflation, which can push central banks to hold or raise interest rates, making credit and monthly payments more expensive in many countries.
"The $100 level is a psychological threshold that carries weight in the markets. Once it is broken, many central banks will have no option but to raise interest rates to control inflation", said Kathleen Brooks, an analyst at brokerage XTB.
U.S. Secretary of State Marco Rubio promised more retaliation: "Iran keeps trying to attack U.S. Navy ships, and every time they do it or try to do it, they will lose tankers", he said, according to Folha, during a visit to Colombia. A Houthi military spokesperson said the group will announce a broad operation inside Saudi territory, according to G1. Both warnings point to continued escalation.