Oil prices have climbed above $100 a barrel for the first time since July 2026, driven by renewed military strikes in the Middle East, including U.S. actions against Iranian tankers and Houthi attacks on Saudi oil infrastructure, according to The Guardian. The U.S. military said it had ‘destroyed’ multiple Iranian tankers after Tehran attempted to strike a U.S. navy warship with ballistic missiles, and the exchange followed Iran-backed Houthi attacks on four Saudi cities the previous night, wounding more than 70 people and setting oil installations ablaze.

Gas Prices Surge in Europe

Gas prices in the UK and mainland Europe also saw significant increases on Wednesday — the benchmark Dutch gas contract rose by nearly 4% to €78.73 a megawatt hour, the highest since January 2023. Meanwhile, the British gas contract rose by 7.77p to 196.57p a therm, the highest since December 2022, according to The Guardian.

The Bank of England governor, Andrew Bailey, warned that the latest oil price surge is putting pressure on inflation and interest rates. ‘The risks, I’m afraid, are on the upside,’ he told MPs. ‘And that’s really the risks coming from energy prices.’

Impact on UK Consumers and Markets

Oil prices have risen by a quarter since early August, as hopes for a permanent resolution to the six-month-old conflict faded and fighting intensified. UK motorists have also been affected, with petrol prices reaching an average of 166.2p a litre on Tuesday, the highest level in four years, according to the AA. Diesel prices hit an average of 187.7p a litre, a level last seen in May — Prices for a litre of petrol have risen 4.4p since the August bank holiday, with diesel up 4.1p.

Energy companies such as BP, Shell, and Centrica were among the top performers in the FTSE 100 on Wednesday morning, with their shares rising by at least 1% due to the higher oil price. However, the overall index was down by 0.5%.

Oil Prices and Market Reactions

According to TradingView, WTI crude oil hit three-month highs near $95 per barrel on renewed military strikes in the Middle East; the S&P 500 and tech-heavy Nasdaq Composite Index were down by 0.5% and 0.4%, respectively, at the time of writing. Brent crude targeted the $100 mark for the first time since July 24. Commenting on the situation, The Kobeissi Letter noted that ‘inflation expectations continue to mount as a result.’ This has been especially apparent in the Consumer Price Index (CPI), an inflation gauge due for release on Friday.

U.S. President Donald Trump downplayed the oil spike in a Truth Social post, pledging lower prices in the future. ‘Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran. Three Dollars a gallon, but ultimately, below Two Dollars a gallon,’ he wrote.

Brent crude is up more than 60% this year and has crossed the $100 mark for three periods so far in 2026.