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Oil prices surged dramatically on Monday, rising more than 25% to their highest levels since mid-2022 as escalating conflict between the United States, Israel, and Iran triggered fears of severe disruptions to global energy supplies.
Energy markets were rattled by the intensifying war, particularly as the crisis is unfolding near the Strait of Hormuz, one of the most critical shipping routes in the world through which roughly 20% of global oil supply normally passes.
By 04:51 GMT, Brent crude futures jumped $24.96, or 27%, to $117.65 per barrel, while U.S. West Texas Intermediate (WTI) crude surged $25.72, or 28.3%, to $116.62 per barrel.
Earlier in the session, WTI climbed as much as 31.4% to $119.48 per barrel, while Brent briefly rose to $119.50, marking one of the largest intraday oil price spikes in history.
The rally came after already sharp gains last week, when Brent crude rose 27% and WTI climbed 35.6% amid escalating geopolitical tensions.
Supply cuts and shipping disruptions drive rally
Concerns over supply shortages intensified as several Middle Eastern producers began cutting output.
Iraq and Kuwait have already reduced oil production, while Qatar has scaled back liquefied natural gas shipments as the conflict disrupted transport routes.
Analysts warn that Saudi Arabia and the United Arab Emirates may soon be forced to cut production as well, as storage facilities fill up due to blocked export routes.
Shipping disruptions through the Strait of Hormuz have slowed tanker traffic significantly, raising concerns particularly for Asian countries that depend heavily on Middle Eastern crude imports.
Leadership change in Iran adds to uncertainty
Market anxiety has also been fueled by political developments in Tehran.
Mojtaba Khamenei, the son of Iran’s late Supreme Leader Ali Khamenei, has been appointed to succeed his father, signaling that hardline leadership remains firmly in control during the conflict with the United States and Israel.
The leadership change has raised doubts about the prospects for a near-term diplomatic resolution.
Weeks or months of higher fuel prices expected
Analysts warn that the war could leave global consumers and businesses facing weeks or even months of elevated fuel prices, even if hostilities end soon.
Damage to infrastructure, disruptions to supply chains, and heightened security risks for shipping routes could continue to constrain energy markets for some time.
In Iraq, production from the country’s major southern oilfields has fallen by about 70% to just 1.3 million barrels per day, as exports through the Strait of Hormuz have become impossible. Storage facilities have already reached maximum capacity, according to officials at the state-run Basra Oil Company.
Meanwhile, Kuwait Petroleum Corporation has begun cutting output and declared force majeure on shipments, though the exact scale of production cuts has not been disclosed.
Attacks on energy infrastructure continue
The conflict has also seen continued attacks on oil facilities across the region.
In the United Arab Emirates, authorities reported a fire in the Fujairah oil industry zone caused by falling debris linked to the conflict. No injuries were reported.
Saudi Arabia’s Defense Ministry said it intercepted a drone heading toward the Shaybah oilfield, highlighting the growing risks facing energy infrastructure in the region.
Calls to release strategic reserves
As oil prices surged, pressure mounted in Washington to stabilize energy markets.
U.S. Senate Democratic leader Chuck Schumer called on President Donald Trump to release crude from the Strategic Petroleum Reserve, a move intended to help ease supply shortages and contain rising fuel prices.
With the conflict continuing to escalate and global oil flows increasingly threatened, energy markets remain highly volatile, and analysts warn that further sharp price swings could lie ahead.
