Oil prices surged to their highest levels since January on Monday following a weekend of military escalation in the Middle East, with the United States joining Israel in a coordinated strike on Iran’s nuclear facilities.
The geopolitical shock has ignited fears of supply disruptions, particularly through the crucial Strait of Hormuz.
As of 0806 GMT, Brent crude futures climbed 72 cents (0.93%) to $77.73 a barrel, while U.S. West Texas Intermediate (WTI) rose 71 cents (0.96%) to $74.55.
Both benchmarks spiked over 3% earlier in the session, reaching $81.40 and $78.40 respectively — levels not seen in five months — before paring gains.
The rally comes in the wake of President Donald Trump’s declaration that U.S. airstrikes had “obliterated” Iranian nuclear infrastructure. Iran has since threatened retaliation, calling Trump a “gambler” and vowing to expand its list of “legitimate targets.”
Strait of Hormuz in Focus
Tensions are now centered on the Strait of Hormuz — a narrow chokepoint through which nearly 20% of the world’s crude oil passes. Market analysts warn that any Iranian move to block or threaten the waterway could send oil prices soaring.
“Geopolitical escalation provides the catalyst for Brent to potentially spiral toward $100, even $120 a barrel,” said Sugandha Sachdeva of SS WealthStreet.
Goldman Sachs echoed similar concerns in a Sunday report, estimating Brent could briefly peak at $110 if oil flows through the strait were halved for just a month.
The energy shock is reverberating globally. Japan has urged for calm, while South Korea expressed concern over potential disruptions to trade. Meanwhile, Russian President Vladimir Putin is set to meet Iranian Foreign Minister Abbas Araqchi in Moscow, underscoring the widening diplomatic fallout.
Despite the volatility, Goldman maintained its assumption of no sustained supply shock, noting that both global oil markets and diplomacy have strong incentives to avoid an extended disruption.
Brent has risen 13% since the conflict erupted on June 13, with WTI up about 10% — a reminder of how tightly global energy security remains tied to Middle Eastern stability.
Related
- [Explainer: What happens if the Strait of Hormuz is blocked?]
- [US strikes Iran nuclear sites: What we know so far]
- [Market Watch: What rising oil prices mean for Africa]
