Global oil prices rise to highest level in a month amid Iran war escalation
Global oil prices have climbed nearly 16% over the past month.
Oil prices on Wednesday climbed to their highest level in more than a month as fighting in the Middle East escalated and a top U.S. official voiced pessimism about peace talks.
Brent crude futures, the benchmark index for worldwide trading, rose to $94.10 a barrel on Wednesday. That figure marked a roughly 16% increase over the past month, catapulting crude prices to their highest level since June 11.
Major stock indexes, meanwhile, were mixed on Wednesday. The Dow Jones Industrial Average ticked up 75 points, or 0.1%, while the S&P 500 increased 0.04%. The tech-heavy Nasdaq declined 0.1%.
The jump in oil prices over recent weeks marked a turnabout for crude costs, which account for a large share of the price of auto gasoline. The average price of a gallon of gas currently stands at $4.06, according to AAA, after having topped $4 earlier this week.
Last month, oil prices briefly fell to their lowest level since before the late February outbreak of the Iran war on news that a preliminary agreement to end the war had been reached.
A resumption of large-scale fighting between the U.S. and Iran, however, has cast doubt over the staying power of that deal.
Secretary of State Marco Rubio on Wednesday voiced a willingness to resolve the war, but he criticized what he considers intransigence on the Iranian side.
"The U.S. would love to reach a diplomatic settlement, we’d love to reach an agreement if it were possible with Iran,” Rubio told reporters at the ASEAN foreign ministers’ meeting in the Philippines.
The Iranians, on the other hand, “don’t seem to be serious” about peace talks, Rubio said.
President Donald Trump is threatening to attack Iran’s critical infrastructure, writing on his social media platform Wednesday morning that the U.S. "will bomb and destroy ONE BRIDGE OR POWER PLANT" any time Iran "shoots at a ship in the Strait of Hormuz."
Trump made clear that this action would be in retaliation to vessels targeted in the Strait, but he did not mention any repercussions for Iran’s attacks on Gulf allies or U.S. assets in recent days.
"Any aggression against Iran, including our infrastructure, will compel a powerful and decisive response," Iranian Foreign Minister Abbas Araghchi said Wednesday in response to Trump's post.
"Those who contribute to such aggression, whatever the kind of support, will also be considered as legitimate targets," Araghchi added.
On Monday, Trump posted on social medial that whenever Iran "kills an American Soldier they will pay for that killing many times over!" However, he has not specified what those consequences might be.
Shipping traffic in the Strait declined sharply in recent weeks as the Iran war escalated. The maritime trading route facilitates transport of about one-fifth of global oil supply.
The U.S. resumed its naval blockade of the Strait last week, reversing a key commitment made as part of the agreement between the U.S. and Iran. That move came after Iran fired upon oil tankers in the strait.
Last week, Iran Brigadier General Abolfazl Shekarchi said Iran retains control of the Strait, claiming the shipping route also belongs to Oman.
Iran "will never allow the Americans to interfere in the Strait of Hormuz," Abolfazl told the IRGC-affiliated Fars News Agency.
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