Oil just hit $100 a barrel. Here's why it matters.

Mar 9
1 min read

Oil is the backbone of the global economy. It fuels the majority of transportation and factories on earth. When the price of oil rises, so do the prices of everything else.

As of today, WTI crude, which is the main U.S. oil benchmark, is trading above $100 a barrel for the first time since 2022. It hit $119.48 overnight, but has now lowered to around $102.50.

So what exactly happened to cause such a major disruption in oil prices?

The U.S. and Israel launched military strikes on Iran. Iran threatened to close the Strait of Hormuz, through which roughly 20% of the world's oil supply passes. Nations such as Iraq and Kuwait have begun to limit production since oil tankers are too afraid to sail through.

This is no trifling matter, this is a blockade of the world's most important oil shipping lane. President Trump posted on Truth Social that higher oil prices were a "very small price to pay" for eliminating the nuclear threat that Iran posed.

The U.S. produces more oil than any country on earth, but this doesn't absorb the shock when major routes get disrupted since oil is priced globally, regardless of where it's produced. As a result, gas prices are likely to jump.

For such a situation, the government's emergency oil reserve, called the Strategic Petroleum Reserve, exists. So far, the Trump administration has been reluctant to make use of it.

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Oil just hit $100 a barrel. Here's why it matters.

Oil is the backbone of the global economy. It fuels the majority of transportation and factories on earth. When the price of oil rises, so do the prices of everything else. As of today, WTI crude, which is the main U.S. oil benchmark, is trading above $100 a barrel for the first time since 2022. It hit $119.48 overnight, but has now lowered to around $102.50. So what exactly happened to cause such a major disruption in oil prices? The U.S. and Israel launched military strikes

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