Oil prices hit $100 for the first time since May - BBC

KUALA LUMPUR, 24 JULY 2026 —

Oil prices have surged to $100 a barrel for the first time since May, driven by escalating conflict in the Middle East and concerns over global energy supplies. The global benchmark, Brent crude, rose more than 6% on Thursday, following several days of increases as the US stepped up military strikes against Iran. This development has significant implications for the global economy, including Malaysia, where higher oil prices can lead to increased costs for businesses and consumers.

The conflict in the Middle East has been a longstanding issue, with tensions between the US and Iran escalating in recent months. The US and Israel began military action against Iran on February 28, leading to a temporary ceasefire. However, the ceasefire has failed, and US Secretary of State Marco Rubio has stated that the people in charge in Iran are "not ready to make a deal". This ongoing conflict has led to a surge in oil prices, with Brent crude rising to $100 a barrel. The benchmark UK gas price has also increased, currently standing at around 150p per therm, up from 98p at the end of June.

The current development in oil prices is largely driven by the Houthi militia's attack on oil tankers in the Red Sea, which threatens a key export route used by Saudi Arabia to bypass the Strait of Hormuz. This has led to a significant increase in oil prices, with prices spiking by more than 6% on Thursday. The US has stepped up military strikes against Iran, further exacerbating the situation. As a result, oil prices have risen to $100 a barrel, the highest level since May. The impact of this development on the global economy is significant, with higher oil prices likely to lead to increased inflation and higher costs for consumers.

In Malaysia, the impact of higher oil prices will be felt across various sectors, including transportation and manufacturing. Higher oil prices typically lead to increased costs for petrol and diesel, which can have a ripple effect on the economy. Households may see prices of other goods, such as food, increase due to businesses passing on higher transportation costs to customers. The Malaysian government may need to consider measures to mitigate the impact of higher oil prices on the economy, including subsidies or other forms of support for affected industries. Details on the specific measures to be taken are not yet available.

The surge in oil prices has significant implications for companies in the energy sector, including those operating in Malaysia. Companies such as Petronas, the national oil company, may see increased revenue from higher oil prices. However, other companies that rely on oil as an input may see increased costs, which could impact their profitability. The impact of higher oil prices on specific companies in Malaysia will depend on their individual circumstances and business models. According to Jonathan Raymond, investment manager at Quilter Cheviot, "More expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and ultimately feeding through into the price of food and other goods."

The outlook for oil prices remains uncertain, with the ongoing conflict in the Middle East likely to continue driving prices higher. Central banks, including the Bank of England and the US Federal Reserve, will need to carefully consider the impact of higher oil prices on inflation and the economy. The Bank of England has held interest rates at 3.75% in its last four meetings, while the US Federal Reserve has held interest rates between 3.5% and 3.75%. The newly-appointed chair of the US Federal Reserve, Kevin Warsh, has stated that the central bank has "no tolerance to persistently elevated inflation", indicating that interest rates may remain high or even be raised further if energy prices remain elevated. As the situation continues to evolve, it is likely that oil prices will remain a key focus for investors and policymakers in the coming months.