Economy 5 min read By Arthur Ellington
Brent Crude Trades at $106.57 as Oil Prices Surge 57% Year-on-Year
Brent crude is trading at $106.57 per barrel, down $3.85 from yesterday but up 57% on the year, as supply risks and geopolitical tensions keep energy markets on edge.
Brent crude oil was trading at $106.57 per barrel as of 9 a.m. Eastern Time, down $3.85 from the previous morning but roughly $39 higher than a year ago. The benchmark, which prices a large share of the world's traded crude, has climbed 17.2% over the past month and 57.4% over the past year, underscoring the scale of the rally in energy markets.
The move comes as supply and demand fundamentals remain tightly balanced. Oil prices are shaped by a complex mix of factors, but at their core lies the balance between available supply and global demand. When risks such as a potential recession or war intensify, prices can change direction quickly. The current level reflects persistent concerns about supply disruptions and the geopolitical backdrop facing major producers.
For British consumers and businesses, the elevated price of crude feeds directly into the cost of fuel at the pump. While the pump price covers refining, wholesale, taxes and retailer margins, crude oil typically accounts for more than half the cost per litre. When oil prices jump, pump prices tend to follow quickly. When oil falls, however, pump prices often slip much more slowly, a pattern known in the industry as «rockets and feathers».
The wider economic consequences are significant. Expensive oil tends to raise the cost of everyday goods, not only through energy bills but also through the logistics of moving products from warehouses and farms to shop shelves. Shipping costs rise, and those increases are passed through to consumers, adding to inflationary pressure across the economy.
Oil and natural gas prices are also linked. A sustained increase in oil prices can push some industries to switch to natural gas for parts of their operations where possible, raising demand for gas and creating knock-on effects in that market. The relationship means that energy price shocks rarely stay contained within one segment of the fuel mix.
In the United States, the Strategic Petroleum Reserve provides a backup supply of crude oil intended to protect energy security during crises such as sanctions, severe storm damage or war. It can cushion the blow when supply shocks send prices soaring, but it is not designed to solve long-term problems. Instead, it offers quick relief for consumers and helps keep vital parts of the economy moving, including essential industries, emergency services and public transport.
Oil's historical performance has been far from stable. The early 1970s brought the first major oil shock when Middle Eastern producers cut exports and placed an embargo on the United States and others during the Yom Kippur War. Prices fell in the mid-1980s amid lower demand and an influx of non-OPEC producers. They surged again in 2008 as global demand grew, then crashed alongside the global financial crisis. During the 2020 Covid lockdowns, demand plummeted and prices fell below $20 per barrel.
Two benchmarks dominate oil pricing. Brent crude is the main global benchmark, while West Texas Intermediate is the main benchmark for North America. Brent is widely regarded as the better gauge of global oil performance because it prices a large share of internationally traded crude, and even the US Energy Information Administration now relies on Brent as its primary reference in its Annual Energy Outlook.
Looking ahead, no one can say for certain where prices will go next. The market remains sensitive to geopolitical developments, decisions by OPEC+ and shifts in energy policy. In the United States, prices can also respond to how friendly an administration is to drilling, since that affects expectations for future supply. In 2025, the Trump administration moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing, reversing the previous administration's restrictions.
US shale production also plays a role in moderating price spikes. Shale is rock containing oil and natural gas, and the more of it that is accessed, the greater the available supply and the less easily prices can spike. For now, with Brent above $106 and up sharply on the year, the pressure on households, businesses and policymakers remains firmly in place.
