Oil prices rise above $100 a barrel for first time since July as Iran war escalates

Oil and gas prices have jumped since the US-Israeli attacks on Iran. Photograph: Neil Hall/EPAView image in fullscreenOil and gas prices have jumped since the US-Israeli attacks on Iran. Photograph: Neil Hall/EPAOilOil prices rise above $100 a barrel for first time since July as Iran war escalatesBrent crude up by more than 2% after latest fire between US and Iran in Gulf and Houthi attacks on Saudi cities

The price of oil has risen above $100 a barrel for the first time since July as the escalating conflict in the Middle East threatens further disruption to global supplies.

Brent crude, the international benchmark for oil prices, rose 2.7% to about $100.6 after tensions increased in the Gulf amid the latest tit-for-tat exchange of fire between the US and Iran.

The US military said it had “destroyed” multiple Iranian tankers, after Tehran attempted to strike a US navy warship with ballistic missiles. The exchange came after Iran-backed Houthis attacked four cities in Saudi Arabia the previous night, wounding more than 70 people and setting oil installations ablaze.

UK and mainland Europe gas prices also soared on Wednesday. The benchmark Dutch gas contract rose by almost 4% to €78.73 a megawatt hour, the highest since January 2023. Meanwhile, the British contract rose by 7.77p to 196.57p a therm, the highest since December 2022.

On Tuesday, the Bank of England governor, Andrew Bailey, said the latest rise in oil prices was 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.”

The oil price has jumped by a quarter since early August as hopes for a permanent resolution to the six-month-old war faded and as fighting flared again.

The energy companies BP, Shell and the British Gas owner, Centrica, were among the top performers across the FTSE 100 on Wednesday morning, with their shares rising by at least 1% on the back of the higher oil price. The index was down by 0.5% overall.

The climb in costs has hit UK motorists, with petrol at the pump reaching an average of 166.2p a litre on Tuesday, the highest level in four years, according to the motoring body the AA.

The AA said diesel hit an average of 187.7p, a price it last reached in May. Prices for a litre of petrol have risen 4.4p since the August bank holiday, with diesel up 4.1p.

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