Oil prices surged Thursday as escalating conflict with Iran and renewed attacks on oil tankers rattled global energy markets, pushing U.S. crude above $100 per barrel.
West Texas Intermediate crude, the primary U.S. benchmark, jumped more than 6 percent to settle at $102.48 per barrel. Brent crude climbed to $107.63, with both benchmarks reaching their highest levels since May. The increase followed additional attacks on shipping and energy infrastructure around the Persian Gulf, further disrupting oil supplies and raising concerns about the security of shipments through the Strait of Hormuz.
The price spike could provide a significant boost to Texas’s oil and gas industry, particularly producers operating in the Permian Basin. A first-quarter Dallas Federal Reserve survey found that Permian producers needed an average WTI price of about $67 per barrel to profitably drill new wells, well below Thursday’s price. The Dallas Fed has also found that Texas generally benefits economically from higher oil prices through increased energy-sector activity, employment, and production, though producers have remained cautious about expanding drilling during the current period of uncertainty.
Higher oil prices could also benefit state finances through increased oil and natural gas severance tax collections, which help fund both the state government and the State Highway Fund. But the surge comes with costs for Texas consumers and businesses, as higher crude prices generally translate into increased gasoline, diesel, transportation, and other energy expenses.
Oil markets are expected to remain volatile as fighting continues and traders assess whether disruptions to Middle Eastern energy supplies will worsen.