Global oil prices cross $100 a barrel as Iran war sends fuel prices surging

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Oil prices surged more than 6% on Thursday.

Global oil prices on Thursday crossed $100 a barrel for the first time since May, after Houthi militants in Yemen claimed to have struck two Saudi tankers in the Red Sea.

The reported attack, which came alongside continued strikes between the United States and Iran, threatened to worsen an oil shock that had already amounted to one of the largest in history.

Brent crude futures, the benchmark index for worldwide trading, briefly topped $100 a barrel on Thursday morning, before dropping to $99.70. That figure marked a roughly 28% increase over the past month, catapulting crude prices to their highest level since May 26.

Major stock indexes tumbled on Thursday in response to surging energy costs. The Dow Jones Industrial Average fell 375 points, or 0.7%, while the S&P 500 declined 0.7%. The tech-heavy Nasdaq dropped 1.4%.

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 $4.09, 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 imperiled that deal.

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.

Saudi Arabia relies on an alternative route through a pipeline that stretches across the country to the Red Sea, where tankers load and transport the crude. The reported Houthi attack on Wednesday, however, risked a slowdown of freight traffic along that waterway.