Oil Surges Toward $110 as Middle East War Escalates; U.S. Diesel Tops $6

Oil prices have surged again, with Brent crude briefly reaching $109.97 a barrel and U.S. West Texas Intermediate crude rising above $100 as escalating conflict in the Middle East intensified fears of prolonged disruptions to global energy supplies.

Oil prices surged to multimonth highs as escalating conflict in the Middle East raised concerns about supply disruptions and shipping through key waterways.

Brent later retreated and settled at about $104.61 a barrel, while WTI settled at about $100.05. Despite the pullback, Brent gained about 8.7% for the week, while WTI advanced about 9.4%, according to Reuters.

The rally has gathered momentum as fighting involving the United States, Iran and Iran-aligned forces threatens oil infrastructure and shipping routes.

Brent's $109.97 intraday high was its highest level in four months.

The Strait of Hormuz remains at the center of the market's concerns.

Disruptions around the waterway have reduced tanker traffic, while attacks and fighting involving Iran and Houthi forces have also raised risks around other critical shipping routes.

The conflict has also affected fuel prices. U.S. diesel prices rose above $6 a gallon, reaching a record level, as shipping constraints in the Gulf and other supply disruptions added pressure to refined-fuel markets.

The Houthi takeover of Mokha port and strategic positions near the Bab el-Mandeb Strait has added another layer of risk to global energy shipping.

The Bab el-Mandeb connects the Red Sea with the Gulf of Aden and is an important route for vessels moving between the Indian Ocean and the Mediterranean.

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The surge in oil prices is raising concerns that prolonged energy disruptions could fuel inflation and complicate decisions by major central banks. Investors are therefore watching not only the physical availability of crude but also the potential economic effects of an extended energy shock.