The global economy is facing the prospect of $100 a barrel oil once again, as Brent crude has risen above $98 a barrel this week. This marks its highest level since July 24 and follows reports of attacks on Saudi energy facilities.
Saudi authorities stated that operations at some energy facilities were halted today after attacks by Yemen’s Iran-aligned Houthis, which wounded more than 70 people. The Financial Times also reported yesterday that Saudi Aramco's oil facilities in Jizan, home to one of Saudi Arabia's largest refineries, had been attacked.
Adding to regional tensions, Iran threatened to establish a new restricted zone in the Persian Gulf if the US persists with its 'economic warfare'. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Iran had "fundamentally recalibrated" its posture towards US forces. Shipping traffic through the Strait of Hormuz has already slowed, with only seven commodity vessels passing through on Monday, down from approximately 130 ships daily before the war.
High oil prices are a concern for central bankers due to their inflationary impact. Later today, Bank of England governor Andrew Bailey and colleagues are scheduled to appear before the Treasury select committee in London to discuss their decision to hold the Bank Rate at 3.75%.