Islamabad (TDI): Crude oil prices surged sharply in Asian trading on Monday, driven by mounting fears of supply disruptions following US and Israeli military strikes on Iran and escalating tensions across the Middle East.
Futures for Brent crude, the international oil benchmark, jumped by around 13% to trade above $82 per barrel, up from Friday’s close of $72. Meanwhile, US benchmark West Texas Intermediate rose nearly 10% to move above $70 per barrel in early trading, according to AFP.
Brent prices had already climbed last week ahead of the strikes that began on Saturday, reflecting growing market anxiety over the stability of energy supplies from the region.
The latest price rally has been fuelled by concerns over maritime transport through the Strait of Hormuz, a critical chokepoint through which about 20% of the world’s oil supply passes.
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While the strait has not been fully closed, reports suggest that only limited traffic, including some Chinese and Iranian vessels, has continued to transit the waterway. Major global shipping companies have confirmed the suspension of fleet movements through the route amid escalating security risks.
Analysts warned that even partial restrictions on Hormuz traffic could remove millions of barrels from global supply.
Oil-importing nations theoretically have emergency buffers, with members of the OECD required to hold at least 90 days of oil reserves. However, analysts cautioned that strategic reserves would be insufficient to offset a prolonged supply shock.
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Natural gas prices were also expected to rise sharply, given Qatar’s role as a major exporter of liquefied natural gas, increasing the risk of renewed global inflationary pressures.
The last time oil prices surged above $100 per barrel was at the onset of the war in Ukraine, which triggered a prolonged period of high energy and consumer prices worldwide.
