Global oil markets experienced a sharp surge on Monday as escalating geopolitical tensions in the Middle East continued to disrupt supply routes and heighten uncertainty across energy markets. Oil prices climbed to levels not seen since mid-2022 as concerns over supply shortages and shipping disruptions intensified following the expanding conflict involving the United States, Israel, and Iran.
Brent crude futures rose by $15.51, marking a jump of 16.7 percent to reach $108.20 per barrel at 0642 GMT. The increase placed Brent on track for the largest single-day price gain ever recorded in the benchmark’s history. At the same time, US West Texas Intermediate crude futures climbed $14.23, or 15.7 percent, reaching $105.13 per barrel during early trading.
Earlier in the trading session, oil markets recorded even sharper spikes before moderating slightly. West Texas Intermediate surged as much as 31.4 percent to touch a session high of $119.48 per barrel, while Brent crude climbed nearly 29 percent to reach $119.50 per barrel. The rally followed an already volatile week in which Brent prices had increased by approximately 27 percent and WTI by more than 35 percent.
Market volatility has been largely driven by disruptions around the Strait of Hormuz, one of the world’s most strategically important energy transit routes. Roughly one-fifth of global oil supplies pass through the narrow shipping corridor, making any instability in the region particularly significant for international energy markets. The ongoing military confrontation involving Iran has heightened security risks in the area, leading to interruptions in tanker movements and reduced shipping activity. Asian buyers, many of whom rely heavily on Middle Eastern crude shipments, are particularly exposed to the consequences of these disruptions.
Despite the strong upward movement in oil prices, gains were partially reduced after reports emerged that global energy authorities are considering emergency measures to stabilize markets. According to the Financial Times, finance ministers from the Group of Seven nations and the International Energy Agency were scheduled to discuss the potential release of strategic oil reserves in order to ease supply pressures. At the same time, Saudi Aramco reportedly offered immediate crude supplies through a series of rare tenders, signaling efforts by major producers to provide short-term relief to markets facing tightening supply conditions.
Energy analysts caution that the trajectory of oil prices will depend largely on whether shipping routes through the Strait of Hormuz can resume normal operations. Vasu Menon, managing director for investment strategy at OCBC in Singapore, noted that continued disruption in oil flows could sustain upward price pressure if tensions remain unresolved.
Supply constraints have also intensified as several major producers begin adjusting output in response to the evolving crisis. Iraq and Kuwait have already started reducing oil production levels as the conflict disrupts shipments from the Middle East. Earlier reductions in liquefied natural gas exports from Qatar have also contributed to the broader energy supply imbalance. Industry analysts believe that the United Arab Emirates and Saudi Arabia may soon face similar output reductions if existing oil storage facilities reach capacity limits. With shipping routes constrained, producers are finding it increasingly difficult to transport crude to international buyers.
Operational challenges are also emerging across energy infrastructure in the region. Bahrain’s state-owned oil company BAPCO declared force majeure following a recent attack on its refinery complex, highlighting the direct impact of the conflict on refining capacity. In the United Arab Emirates, authorities reported that a fire broke out in the Fujairah oil industry zone after debris fell in the area, although no injuries were reported. Meanwhile, Saudi Arabia’s Defense Ministry stated that it intercepted a drone heading toward the Shaybah oilfield, underscoring the growing security risks surrounding key energy facilities.
Political developments in Iran have also influenced market sentiment. Mojtaba Khamenei was appointed to succeed his father Ali Khamenei as Iran’s supreme leader, signaling that the country’s hardline leadership structure remains firmly in place during the ongoing conflict. According to commodity analyst Satoru Yoshida of Rakuten Securities, the leadership transition has reinforced expectations that Iran will maintain its current geopolitical stance. He suggested that the development could complicate efforts by US President Donald Trump to pursue regime change in Tehran.
Market participants reacted to these signals by increasing oil purchases, anticipating that Iran may continue efforts to restrict shipping through the Strait of Hormuz and potentially target energy infrastructure across the region. Yoshida predicted that WTI crude could climb toward $120 and even reach $130 per barrel within a relatively short timeframe if disruptions persist. Energy analysts warn that even if the conflict subsides quickly, global consumers and businesses could face elevated fuel costs for weeks or months. Damage to energy infrastructure, supply chain disruptions, and heightened security risks across shipping routes may take significant time to resolve.
Daniel Hynes, senior commodity strategist at ANZ, noted that further escalation could lead to producers shutting down oil wells temporarily. Such shutdowns would not only reduce production but could also delay recovery once the conflict ends, prolonging tight supply conditions in global markets. Meanwhile, production in Iraq has already been severely affected by the shipping crisis. Output from the country’s major southern oilfields has reportedly dropped by around 70 percent to approximately 1.3 million barrels per day due to the inability to export crude through the Strait of Hormuz.
Officials from Iraq’s state-run Basra Oil Company indicated that crude storage facilities have already reached maximum capacity, further limiting the country’s ability to maintain normal production levels. Kuwait Petroleum Corporation has also begun cutting oil output and declared force majeure on shipments, although the company has not disclosed the exact scale of production reductions. Amid the escalating crisis, political tensions between global powers continue to intensify. Israel’s military has reportedly warned that any successor to Iran’s late leader could face similar targeting, while US President Donald Trump suggested that the conflict may only end when Iran’s military leadership and governing structure are dismantled.
Rising oil prices have also triggered political reactions in the United States. Senate Democratic Leader Chuck Schumer urged President Trump to release oil from the US Strategic Petroleum Reserve in an effort to stabilize global energy markets and reduce price shocks. Schumer stated that releasing reserves could help ease market volatility and reduce the financial burden on consumers already experiencing rising fuel costs due to the ongoing conflict.
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