Oil prices surge past $100 for first time in two months amid Middle East tensions

Oil prices surged past the $100-per-barrel mark for the first time in two months on July 23, 2026, as escalating conflict in the Middle East disrupted global crude supplies. Brent crude, the international benchmark, jumped 7.2% to $100.88 a barrel, driven by attacks on two Saudi oil tankers in the Red Sea and threats to key shipping routes like the Strait of Hormuz. The violence has raised fears of prolonged supply disruptions, pushing energy costs higher and rattling global markets. U.S. President Donald Trump warned of “major military punishment” against Yemen’s Houthi rebels, who are backed by Iran, if the attacks on oil shipments continue. Just weeks earlier, Brent crude had fallen below $72 per barrel, nearing pre-war levels, after hopes rose that the Strait of Hormuz would fully reopen to tankers following the U.S.-Iran conflict. The spike in oil prices threatens to reignite inflationary pressures, potentially forcing the Federal Reserve and other central banks to raise interest rates. Higher borrowing costs could slow economic growth and weigh on stock markets, which were already under pressure. The S&P 500 dropped 0.8%, heading for its first back-to-back weekly loss since March, while the Dow Jones Industrial Average fell 363 points (0.7%) and the Nasdaq composite slid 1.6%. The yield on the 10-year U.S. Treasury rose to 4.70% from 4.67% the previous day and 3.97% before the Iran war began, pushing long-term mortgage rates to their highest levels in nearly a year. Fuel-dependent industries took the hardest hits. American Airlines, despite reporting stronger-than-expected profits and raising airfares to offset higher fuel costs, saw its stock plummet 9.1%. Southwest Airlines also fell 4.2%, despite beating profit and revenue expectations, as investors remained concerned about rising expenses. Tesla’s stock sank 9.8% after the company reported weaker-than-expected quarterly profits, further dragging down the S&P 500 due to its large market value. Meanwhile, Alphabet’s shares declined as investors questioned the long-term returns on its massive AI investments, despite strong cloud revenue growth of 82% last quarter. Global markets reacted sharply, with Europe’s CAC 40 in France dropping 1.7%, while Asia showed mixed results—South Korea’s Kospi surged 4.4%. The geopolitical instability underscores the fragile balance of global oil supply chains and the far-reaching economic ripple effects of energy price shocks.