Oil Soars Nearly 10% as U.S.-Israel Strikes on Iran Ignite Fears of Major Supply Shock

Oil prices surged sharply on Monday as markets reacted to a dramatic escalation in the Middle East, with concerns mounting over potential supply disruptions after the United States and Israel launched a broad wave of attacks against Iran.

By 03:35 ET (08:35 GMT), Brent crude futures jumped 9.6% to $79.78 a barrel, after briefly touching their highest level since January 2025. U.S. West Texas Intermediate (WTI) crude climbed 8.8% to $72.95 a barrel, hovering just below its highest level since June.

Middle East conflict rattles energy markets

The rally followed weekend strikes by U.S. and Israeli forces targeting Iran, which reportedly killed hundreds, including Supreme Leader Ayatollah Ali Khamenei and several senior officials. Tehran swiftly retaliated, launching missile attacks against Israel and U.S.-linked targets across the region, including Bahrain, Kuwait, Qatar and the United Arab Emirates.

Iran was also reported to have attacked several vessels transiting the Strait of Hormuz, sharply heightening fears of imminent disruptions to global oil flows.

The Strait of Hormuz is one of the world’s most critical energy chokepoints, with roughly 20% of global oil consumption passing through the narrow waterway each day. Any sustained disruption could have far-reaching consequences for global energy supply and prices.

U.S. President Donald Trump said on Sunday that military operations against Iran were set to continue in the coming days, while warning that further American casualties were likely, comments that reinforced expectations of a prolonged conflict.

The latest escalation marks the second major U.S. military operation against Iran since mid-2025. Tensions have been fueled by Tehran’s nuclear enrichment activities, which remain a key point of contention after recent negotiations between Washington and Tehran ended without a deal. In June 2025, the U.S. had already struck several of Iran’s nuclear facilities in an effort to curb its nuclear ambitions.

Given the scale of the conflict and its proximity to critical energy infrastructure, analysts expect oil prices to remain elevated in the near term.

OPEC+ output hike offers limited relief

Adding a counterweight to geopolitical risks, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed on Sunday to raise oil production by 206,000 barrels per day.

While the increase could help offset some supply losses tied to the U.S.-Iran conflict, its effectiveness remains uncertain. Analysts caution that shipping disruptions and security risks could blunt the impact of higher output, particularly if exports through the Strait of Hormuz are constrained.

Sunday’s decision marks OPEC+’s first production hike since late 2025, as the group seeks to regain market share after having raised output by roughly 2.5 million barrels per day over the course of last year. The cartel had paused further increases in November.

For now, however, escalating geopolitical tensions are dominating oil market sentiment, pushing prices sharply higher and keeping traders on high alert.