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NEW YORK (AP) -- Oil prices shot past $100 a barrel Wednesday as fighting between the U.S. and Iran escalated, threatening to increase costs for consumers and businesses worldwide.
Brent crude, the international standard, climbed into triple digits for the first time since July and settled at $101.21 a barrel by the end of the day's trading, after attacks on oil facilities and ships in the Middle East that could further debilitate an already weakened supply chain. U.S. benchmark crude was close behind, settling at $96.05 a barrel.
The latest developments in the war, both prospects of peace and renewed hostilities, have caused market whiplash before. Oil returning to the $100 mark raises concern because experts have warned that a prolonged period of steep prices would worsen the now over six-month-long conflict's economic fallout.
Crude is the main ingredient for everyday fuel like gasoline and diesel -- which are also seeing a renewed spike in prices -- and higher energy costs overall trickle down to just about every part of the supply chain, from groceries to clothing, cosmetics and more.
"Brent breaking above $100 is a major psychological milestone for markets, but the bigger concern is what this means for inflation," Lukman Otunuga, market research head at global broker FXTM, noted.
Political ramifications could pile up in the meantime. U.S. President Donald Trump, who has repeatedly tried to downplay the war he co-launched, said Wednesday that oil prices likely won't come down until after November's midterm elections.
This week's jump follows the latest escalation: the U.S. military reported striking five Iranian tankers on Tuesday, in response to attempted missile attacks on a Navy warship and after attacks by an Iranian-backed Houthi rebel group ignited fires at oil facilities in Saudi Arabia.
Recent stepped-up attacks by Yemen's Houthis could constrain global oil supplies even more because they targeted an alternative shipping route that Saudi Arabia has relied on to transport oil during the war.