Oil moves back above $100 a barrel
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LONDON: Oil prices have jumped back above $100 a barrel this Tuesday, as the world struggles with a major energy shortage. Brent crude, the global benchmark, rose 4% to $103.94, reversing a brief price drop from the day before. This bounce reflects the market's fear that a key shipping route remains blocked, keeping global fuel supplies tight.
The main cause of the high prices is the closure of the Strait of Hormuz. This narrow waterway is the world’s most important oil chokepoint, usually carrying 20% of all global oil and natural gas. Since it was blocked on February 28, nearly 11 million barrels of oil per day have been cut off from the market, creating the biggest energy supply shock in recent times.
To keep their economies moving, countries are taking emergency steps. The US has released record amounts of oil from its emergency reserves, and China announced today it is capping fuel prices to help drivers handle the rising costs. Despite these efforts, experts say oil will likely stay expensive, potentially between $100 and $110 until ships can safely move through the Strait again.
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