Oil price eases after Brent tops $100, but inflationary risks mount

(Sharecast News) - Oil prices pulled back slightly on Friday after hitting their highest in two months, as Brent crude briefly topped the $100 mark amid an escalation of conflict in the Middle East. Brent was down 2.0% at $98.65 a barrel by 0910 BST after surging 7% to $100.69 a barrel by the end of play on Thursday. This was the first settlement price above $100 since 22 May.



AJ Bell's investment director Russ Mould said Brent was "firmly back in alarm bell territory [...] with seemingly little prospect of tensions easing in the Middle East in the short term".

Prices rose for the fifth straight session on Thursday after Iranian-backed Houthi militants targeted two Saudi oil tankers in the Red Sea and Donald Trump threatened once again to bomb Iranian infrastructure.

According to Patrick Munnelly, partner of market strategy at Tickmill Group, oil's 38% surge so far this month was enough to overshadow recent softer readings on US consumer price and wholesale inflation for June.

"Middle East risk remains the core driver. Trump's threat of a 'massive attack' on Iran, alongside warnings of 'major military punishment' for the Houthis after attacks on Saudi tankers in the Bab el-Mandeb Strait, has left risk sentiment firmly on the back foot," Munnelly said.

"The geography matters: markets are no longer just pricing Hormuz risk but a broader disruption threat across key maritime chokepoints. That raises the risk premium through crude, refined products, shipping, insurance and inflation expectations."

Also adding to inflationary concerns on Friday were tariff concerns as Trump restarted his global trade war on more than 80 nations. The US president is attempting to use anti-forced labour laws to get around a Supreme Court ruling that found his previous package of levies illegal.

The president invoked Section 301 of the Trade Act - a tool historically used to counter unfair practices - allowing him to maintain a near‑universal tariff floor without relying on contested presidential powers.

"This announcement had largely been expected, but it nonetheless caused new dismay amongst trading partners," said Bas van Geffen, senior macro strategist at Rabobank.