TOKYO: Global oil prices surged sharply in early trading on Monday, rising by nearly 20 percent and reaching their highest levels since July 2022, as the expanding conflict between the United States, Israel, and Iran heightened fears of supply disruptions and shipping risks in the Middle East.
Benchmark Brent crude futures jumped as much as $18.35, or 19.8 percent, to $111.04 per barrel before easing slightly to $107.07, still up $14.38 or 15.5 percent in early trading. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures climbed $15.27, or 16.8 percent, to $106.17 per barrel after earlier surging to $111.24, reflecting a gain of more than 22 percent.
The sharp spike follows last week’s strong rally, when Brent crude rose 27 percent and WTI surged 35.6 percent, as investors reacted to growing concerns about disruptions in global oil supply.
Markets were further shaken by political developments in Iran, where Mojtaba Khamenei was named as the successor to Iran’s Supreme Leader Ali Khamenei, signaling that hardline leadership will remain in control of Tehran amid the ongoing conflict.
The situation intensified after Israel expanded its military operations in the region. Israeli forces reportedly carried out strikes targeting Iranian commanders in Beirut, broadening the conflict beyond Iran’s borders and increasing geopolitical tensions across the Middle East.
The Israeli military has warned it would target any successor to Iran’s leadership, while U.S. President Donald Trump stated that the conflict might continue until Iran’s military capabilities and ruling structure are eliminated.
Analysts warn that even if the week-long conflict ends quickly, global energy markets could face weeks or even months of elevated fuel prices due to damaged infrastructure, disrupted logistics, and heightened shipping risks.
A key concern for global markets is the potential disruption to shipments passing through the Strait of Hormuz, one of the world’s most critical maritime routes for crude oil exports.
According to shipping data, major oil exporter Saudi Arabia has increased shipments from the Red Sea to mitigate the impact of potential disruptions. However, analysts say these additional volumes remain insufficient to fully offset the decline in supplies moving through the Strait of Hormuz.
The escalating conflict has raised fears of prolonged volatility in global energy markets, which could translate into higher fuel prices for consumers and businesses worldwide.
By Reuters
