12.45pm BST
Oil marches towards $150 a barrel
- guardian.co.uk,
- Monday June 30, 2008
The price of oil continued its seemingly relentless march towards $150 a barrel today, driven by the simmering tensions between Iran and Israel.
The cost of a barrel of US crude hit $143.67 this morning, its highest-ever level. London Brent crude also reached a new peak of $143.81 a barrel. Both have more than doubled in the last twelve months, helping to fuel inflation and spark protests worldwide.
Traders said there are worries that Middle East oil supplies could be disrupted by the growing row between Iran and Israel, and speculation that military action could break out.
On Saturday the commander of Iran's Islamic Revolution Guards ratcheted up the tension by threatening to impose controls on shipping in the Gulf – through which 40% of the world's oil travels – if Israel launched an attack.
Major general Mohammad Ali Jafar also pointed out that Israel was "completely within the range" of Iran's missiles.
The comments were made after the New York Times reported that US military think Israel rehearsed a potential bombing attack on Iran's nuclear sites earlier this month.
A drop in the strength of the dollar also pushed up oil, which is quoted in the US currency, Ladbrokes last week stopped taking bets on US crude reaching $150 a barrel this year, after the head of Opec suggested that it could soon hit $170 a barrel. This month's summit in Saudi Arabia to discuss the oil crisis also failed to push the price down.
The rising oil price has meant a sharp jump in petrol prices, as well as goods such as food that are transported significant distances. Today French lorry drivers began demonstrating for government help, following similar protests earlier this month in Spain and the UK.
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