SINGAPORE: Oil prices continued to climb on Monday as the ongoing conflict between the United States, Israel, and Iran entered its third week, raising serious concerns over potential damage to key oil infrastructure and keeping the strategic Strait of Hormuz closed—marking one of the largest disruptions to global oil supplies in recent history.
Brent crude futures surged by $2.01, or 1.95%, reaching $105.15 per barrel by 2338 GMT after settling $2.68 higher in the previous session. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose $1.61, or 1.63%, to $100.32 per barrel, following a nearly $3 gain on Friday.
Both benchmark contracts have climbed more than 40% this month, hitting their highest levels since 2022. The sharp rally comes after U.S.-Israeli strikes on Iran prompted Tehran to halt shipping through the Strait of Hormuz—a vital maritime corridor that carries roughly one-fifth of the world’s oil supply.
U.S. President Donald Trump has warned of further strikes on Iran’s Kharg Island oil export hub after recent attacks on military targets. Kharg Island is critical to Iran’s energy sector, handling about 90% of the country’s oil exports.
In retaliation, Iranian drones reportedly struck a major oil terminal in Fujairah, United Arab Emirates. Although oil loading operations at Fujairah have resumed, sources indicated it remains uncertain whether activities have fully returned to normal. The port, located outside the Strait of Hormuz, serves as a key outlet for around 1 million barrels per day of the UAE’s Murban crude—approximately 1% of global oil demand.
According to SEB analyst Erik Meyersson, the U.S. is considering high-risk military options, including raids on Iran’s nuclear sites, seizing the Kharg Island export hub, and deploying forces in southern Iran to secure the Strait of Hormuz.
“These scenarios imply significant escalation and require a willingness to accept substantially higher risks,” Meyersson noted.
President Trump has also urged allied nations to deploy naval forces to safeguard shipping routes. Reports indicate Washington may soon announce a multinational coalition to escort vessels through the Strait of Hormuz.
To counter rising oil prices, the International Energy Agency (IEA) announced on Sunday that more than 400 million barrels of strategic oil reserves will be released into global markets—marking a record drawdown aimed at stabilizing supply. Stocks from Asian and Oceanian countries will be released immediately, while supplies from Europe and the Americas are expected to follow by the end of March.
Diplomatic efforts to de-escalate the crisis have so far stalled. The Trump administration has reportedly rejected attempts by regional allies to initiate negotiations, while Iran has ruled out a ceasefire unless U.S. and Israeli strikes cease.
“As the conflict enters its third week, the absence of a clear resolution is increasing fears of an uncontrolled escalation,” Meyersson added.
Despite the tensions, U.S. Energy Secretary Chris Wright expressed optimism, stating that the conflict could end within the next few weeks, potentially allowing oil supplies to stabilize and energy prices to decline.
By Reuters
