Oil Tops $110 as Arctic Leasing Fails to Cool Crude Rally

Brent crude oil traded at $110.10 per barrel at 9 a.m. Eastern Time on Monday, down 27 cents from the previous session but up nearly 80% from a year ago, according to market data. The price of oil yesterday closed at $110.37.

The surge has outpaced domestic supply interventions. Earlier this year, 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 Biden-era drilling restrictions. Those new leases take years to produce physical barrels. Markets are pricing immediate global tightness instead.

A month ago, the price of oil stood at $104.25. One year ago, it was $61.43. That $49 annual increase represents the sharpest sustained climb since prices briefly breached $100 following Russia’s invasion of Ukraine in early 2022.

U.S. shale oil production remains near record levels, exceeding 13 million barrels per day, according to the U.S. Energy Information Administration. Shale output typically acts as a ceiling on runaway rallies because drillers can bring wells online faster than conventional projects. The current run past $110 indicates that even maximum shale output cannot offset broader international shortfalls.

Retail gasoline tracks these moves with a delay. Crude accounts for more than half the cost of a gallon of gas. When futures markets push spot prices higher, pump costs rise quickly. When crude retreats, retail prices fall slowly — an industry dynamic economists call “rockets and feathers.”

Washington holds limited tools to force immediate relief. The U.S. Strategic Petroleum Reserve sits near four-decade lows after the Biden administration authorized historic withdrawals totaling 180 million barrels in 2022 to counter the post-invasion spike. Refilling those caverns requires purchasing crude at today’s elevated rates.

Expensive crude bleeds into consumer inflation beyond the gas station. Shipping costs rise. Manufacturing inputs tied to petrochemicals get pricier. Natural gas markets also shift; when oil climbs high enough, industrial buyers switch to natural gas where possible, pulling those prices upward in tandem.

Traders track two main benchmarks: Brent crude oil, which sets the global standard, and West Texas Intermediate (WTI), the North American reference. The EIA now uses Brent as its primary gauge in its Annual Energy Outlook because it captures a wider share of internationally traded volumes.

History shows little precedent for sustained stability. The 1973 Arab embargo quadrupled prices. A mid-1980s non-OPEC supply flood collapsed them. The 2008 financial crisis erased a $147 peak in months. In April 2020, pandemic lockdowns briefly pushed U.S. futures below zero.

Futures contracts update constantly during trading hours. Every geopolitical headline or OPEC+ quota adjustment shifts the order book immediately. Current price of oil readings reflect real-time auctions of future delivery, not static valuations.