Oil prices surged past $100 a barrel Monday, reaching levels not seen since Russia’s 2022 invasion of Ukraine, as attacks between the U.S., Israel, and Iran intensified across the Middle East. Brent crude, the global benchmark, approached $120 a barrel in early trading before settling around $104, a 12% increase on the day, according to CNN reporting. West Texas Intermediate (WTI), the U.S. Benchmark, rose more than 11% to $101, briefly hitting $110 Sunday evening.
The price increases follow U.S. And Israeli attacks on Iran and subsequent retaliatory strikes against Israel and U.S. Military installations in the Gulf region, disrupting global energy supply chains. Attacks on two vessels traveling through the Strait of Hormuz, a critical waterway for oil exports, have further restricted the ability of countries to export oil, according to the Associated Press.
Energy experts predict that prolonged attacks could lead to higher prices for crude oil and gasoline. WTI was trading at $72.79 a barrel early Monday, up 8.6% from Friday’s price of approximately $67, while Brent crude was at $79.41, a 9% increase from its Friday trading price of $72.87, which was already a seven-month high.
The conflict is already impacting financial markets. Dow futures fell 200 points as oil prices continued to climb, and Wall Street futures dropped amid heightened Middle East tensions. Treasury yields likewise jumped as investors reacted to the rising oil prices and geopolitical uncertainty, Reuters reported.
President Donald Trump, in a post on social media, characterized the surging oil costs as a “extremely small price to pay” for U.S. And global safety and peace, stating that prices would “drop rapidly when the destruction of the Iran nuclear threat is over.”
Analysts at Saxo Markets suggest that investor concerns are shifting towards a more protracted war and a sustained impact on energy supply and prices. Neil Wilson, a strategist at the firm, noted that “complacency has been replaced by a degree of panic because the market is now pricing in a more sustained hit to energy and trade flows.” This shift in sentiment comes after the appointment of Mojtaba Khamenei as Iran’s next supreme leader, following the death of his father, Ali Khamenei, in the initial wave of U.S. And Israeli strikes. Wilson characterized the appointment as a signal of Iran’s continued hardline approach.
The Center for Strategic and International Studies (CSIS) noted that the second week of the Mideast Gulf war began with a “historic price spike” as energy exports from the region remained halted and fighting intensified. The CSIS analysis examines the stakes for world energy markets and potential measures to address a looming oil and gas shortfall.
Higher global energy prices are expected to translate into increased costs for consumers, impacting gasoline prices and the cost of groceries and other goods, particularly as many are already facing elevated inflation. The Independent reported that global oil prices show no signs of abating a week after the escalation of the conflict.
