Oil prices surged Monday morning to levels not seen since July 2022, driven by escalating tensions in the Middle East and the appointment of Mostafa Chamenei as Iran’s modern supreme leader. U.S. West Texas Intermediate (WTI) crude futures jumped as much as 30.04%, reaching $118.21 per barrel, while Brent crude rose 27.54% to $118.22 a barrel.
The price spike follows attacks on energy infrastructure and the selection of Mostafa Chamenei, son of Ayatollah Ali Khamenei, who died in attacks by the United States and Israel, to the position of supreme leader. According to analysts, the market interpreted this transition as a signal that Tehran will maintain a hardline course.
The appointment of Mostafa Chamenei, 56, was made by the Assembly of Experts, a body of clerics responsible for choosing the supreme leader. The late Ayatollah Ali Khamenei had reportedly indicated his successor should be “hated by the enemy,” rather than praised by them, according to Mohsen Hejdari, a representative in the Assembly of Experts.
The change in leadership comes amid a rapid escalation of conflict in the Middle East. The Korps of the Islamic Revolution Guards (IRGC) quickly offered its support to the new leader, a move seen as crucial for the stability of the regime and its continued military operations in the region.
Former U.S. President Donald Trump warned that the new Iranian leader “won’t last long” without Washington’s support, even before the official announcement of the succession.
The market reaction was particularly pronounced in Asia. The Nikkei 225 index in Japan plummeted 7%, while the KOSPI in South Korea fell almost 6%. Trading was temporarily suspended in Seoul after a sharp sell-off triggered emergency safety procedures.
Idemitsu Kosan, a major Japanese refinery, warned clients of potential disruptions to ethylene production due to a lack of necessary feedstock for plastics manufacturing, threatening supply chains for the automotive and electronics industries, according to Asia Nikkei.
The surge in oil prices is adding to global economic uncertainty. The price of WTI crude has not been at this level since July 2022, and the rapid increase is likely to fuel inflationary pressures worldwide.
