Oil prices skyrocket to highest levels since 2022 as US spends $25 billion on war

Soaring oil prices will have an impact at the pumps around the world as the Iran conflict drags on.

Oil prices have surged to more than US$119 a barrel, the highest level since early 2022, raising the economic toll from the war in the Middle East.

Brent oil futures were up 7.6% at US$119.69 ($205), its highest level since the early days of the Ukraine war in 2022. Oil prices have surged since the US-Israel attacks prompted Iran to effectively close the Strait of Hormuz, a key waterway for petroleum deliveries.

Oil prices jumped on reports that US President Donald Trump was unlikely to accept an Iranian proposal to restore traffic in the Strait of Hormuz, and after Qatar warned of a possible “frozen conflict”.

US benchmark West Texas Intermediate broke US$100 on Tuesday for the first time in two weeks.

In a meeting with President Trump at the White House on Tuesday, oil executives were told that the United States could extend its naval blockade of Iran for months more.

A source said the meeting discussed “the steps President Trump has taken to alleviate global oil markets and steps we could take to continue the current blockade for months if needed and minimise impact on American consumers”.

The war against Iran has cost the US military US$25 billion since it was launched in late February, a senior Pentagon official said on Wednesday.

Acting Pentagon comptroller Jules Hurst told lawmakers: “We’re spending about US$25 billion on Operation Epic Fury. Most of that is in munitions.”

US Defence Secretary Pete Hegseth later told the same congressional hearing that the estimated figure was less than US$25 billion.

The United States and Israel launched a massive air campaign against Iran’s military and leadership on February 28.

Trump has indefinitely extended what was an initial two-week ceasefire that brought a halt to the fighting, but the conflict - and its widespread economic fallout - remains unresolved.

- AFP