Oil Prices Jump Over 25% as Middle East Conflict Disrupts Supply

Global oil prices soared on Monday, climbing more than 25% to their highest levels since mid-2022 as supply cuts and fears of prolonged shipping disruptions shook energy markets amid the expanding conflict involving Israel, Iran and the United States.

Traders are particularly concerned about the impact on the Strait of Hormuz, a critical shipping route that normally carries about one fifth of the world’s oil supply. Disruptions to tanker movements and rising security risks have already slowed shipments, leaving Asian importers especially exposed because of their reliance on Middle Eastern crude.

Brent crude futures rose $24.96, or 27%, to $117.65 a barrel, while U.S. West Texas Intermediate climbed $25.72, or 28.3%, to $116.62. Earlier in the session, Brent briefly touched $119.50 and WTI reached $119.48 a barrel.

Prices had already surged last week, with Brent up 27% and WTI gaining more than 35%. Analysts warned that markets could remain volatile if tensions persist.

Several producers have already begun reducing output as shipping disruptions intensify. Iraq and Kuwait have started cutting production, while earlier supply reductions of liquefied natural gas from Qatar have also tightened energy markets.

Oil prices were also supported by political developments in Tehran, where Mojtaba Khamenei was named successor to his father Ali Khamenei. The appointment signalled that hardline leadership remains in place during the ongoing conflict.

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