Global oil markets opened the week with a sharp rally as the expanding conflict involving the United States, Israel and Iran disrupted energy flows from West Asia and raised concerns about prolonged supply shortages.
Prices jumped around 20 per cent on Monday, reaching levels not seen since mid‑2022, according to market data reported by Reuters.
The sudden spike reflects growing fears that the war could severely constrain energy exports from one of the world’s most important oil‑producing regions, while also threatening shipping through the Strait of Hormuz, a critical chokepoint for global oil trade.
Analysts say the combination of production cuts, damaged infrastructure and shipping disruptions could leave consumers and businesses worldwide facing elevated fuel prices for weeks or even months.
Oil Prices Jump To Multi‑Year Highs
Crude benchmarks surged sharply in early trading on Monday.
Brent crude futures rose as much as $18.35, or 19.8 per cent, to $111.04 per barrel, their highest level since July 2022. In early Asian trading hours, Brent was trading $15.24 higher, up 16.4 per cent at $107.93 per barrel.
US West Texas Intermediate (WTI) crude futures also climbed strongly, rising $16.50, or 18.2 per cent, to $107.40 per barrel after earlier jumping as much as $20.34, or 22.4 per cent, to $111.24.
The surge follows a week of steep gains in energy markets. Brent crude had already climbed 27 per cent last week, while WTI rose 35.6 per cent, before the latest spike on Monday.
The sharp rally reflects mounting anxiety over disruptions to supply chains from West Asia, a region responsible for a significant share of global oil exports.
Supply Cuts From Key Producers
The conflict has begun affecting production levels across the region.
Iraq and Kuwait have started cutting oil output, while earlier reductions in liquefied natural gas exports from Qatar had already signalled pressure on energy supplies.
Analysts say other major producers could soon face similar challenges. Such shutdowns could prolong supply disruptions even after hostilities decline.
Iraq’s Output Falls Sharply
Iraq has already seen a steep drop in production.
Three industry sources told Reuters that oil output from the country’s main southern oilfields has fallen by 70 per cent to around 1.3 million barrels per day.
The decline is linked to the inability to export oil through the Strait of Hormuz, which has become a focal point of the conflict.
An official with Iraq’s Basra Oil Company said crude storage facilities in the country have already reached maximum capacity.
Meanwhile, Kuwait Petroleum Corporation began reducing production on Saturday and declared force majeure on shipments, although it did not disclose the exact volume of output cuts.
Infrastructure Risks Across The Region
Energy infrastructure in several countries has also been threatened.
Authorities in the United Arab Emirates said a fire broke out in the Fujairah oil industry zone after debris fell in the area. Officials said there were no reported injuries.
In Saudi Arabia, the defence ministry said it intercepted a drone heading toward the Shaybah oilfield, highlighting the growing risks facing energy infrastructure across the Gulf.
These developments have added to market concerns that the conflict could spread further and disrupt additional supply routes.
Leadership Change In Iran Adds Uncertainty
The geopolitical situation intensified further when Iran appointed Mojtaba Khamenei as Supreme Leader, succeeding his father, Ali Khamenei.
The move suggests that Iran’s hardline leadership structure remains firmly in place despite the ongoing conflict.
Calls To Stabilise Oil Markets
As prices surged, political pressure also mounted in Washington.
US Senate Democratic Leader Chuck Schumer called on President Donald Trump to release oil from the Strategic Petroleum Reserve (SPR) in order to stabilise energy markets.
“President Trump should release oil from the SPR now to stabilise markets, bring prices down, and stop the price shock that American families are already feeling thanks to his reckless war,” Schumer said in a statement.
Risk Of Prolonged Energy Shock
Market participants warn that the consequences of the conflict could extend well beyond the immediate fighting.
Even if hostilities end quickly, suppliers may still face damaged infrastructure, logistical disruptions and heightened shipping risks.
These factors could keep oil prices elevated for an extended period, increasing fuel costs for households and businesses worldwide.
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