Oil Tops $100 a Barrel as Middle East Tensions Reignite Inflation Fears

Rising tensions in the Middle East have pushed global oil prices back above $100 a barrel, reviving inflation concerns around the world. Even if the conflict does not become prolonged, analysts say a shock from higher crude prices will be hard to avoid.

Brent crude for September settlement rose 7.04% to close at $100.69 a barrel on July 23. It was the first close above $100 since May 22, when it settled at $103.54, ending a gap of about two months. Tensions escalated after Iran-backed Houthi rebels in Yemen attacked a Saudi vessel in the Red Sea.

The surge has fueled concern that central banks may need to raise benchmark interest rates, sending the yield on the 10-year US Treasury to its highest level in 18 months. Stocks also came under pressure. The Nasdaq fell 2.15% that day, and South Korea's Kospi slid 5.72% on July 24.

Hwang Jeong-su, New York correspondent hjs@hankyung.com