Global oil prices surged to their highest levels since January following the United States’ weekend strikes on Iranian nuclear facilities, intensifying fears of supply disruptions amid rising tensions in the Middle East.
Brent crude futures climbed by $1.52, or 1.97%, reaching $78.53 a barrel in early Asia trading, while US West Texas Intermediate (WTI) rose $1.51, or 2.04%, to $75.35. Both benchmarks had earlier spiked by more than 3%, touching five-month peaks of $81.40 and $78.40, respectively, before easing slightly.
The rally came after US President Donald Trump confirmed that American forces had joined Israeli military efforts in launching strikes on Iran’s key nuclear infrastructure, declaring that Iran’s main sites had been “obliterated.” Tehran has vowed to respond, stoking fears of further escalation that could threaten the global energy supply.
Iran, the third-largest oil producer in OPEC, has long maintained control over the Strait of Hormuz, a narrow but vital maritime corridor through which around 20% of the world’s crude oil flows. Any disruption in the strait’s accessibility could have far-reaching consequences for international markets.
Market analysts warn that Iran’s potential retaliation could include attempting to block the strait, despite the economic risks to its own oil exports. Iranian state media reported Monday that the country’s parliament had passed a measure approving such a closure, although Iran has previously issued similar threats without acting on them.
Sugandha Sachdeva, founder of research firm SS WealthStreet, said the geopolitical turmoil has become a “fundamental catalyst” for further price spikes. “Prices could easily spiral toward $100, with $120 per barrel now a plausible scenario,” she noted.
According to Goldman Sachs, if oil flows through the Strait of Hormuz were halved for even a month, Brent could temporarily peak at $110 per barrel. The investment bank added that a 10% reduction in supply over the longer term could persist if the disruption continues, although it still expects major global powers to intervene and prevent a prolonged crisis.
Sparta Commodities analyst June Goh warned that fears of damage to oil infrastructure and tanker shipping are leading shippers to avoid the region. Even with alternative pipelines, a complete closure of the strait would result in significant export bottlenecks.
Since Israel launched its offensive on June 13, Brent has risen 13%, while WTI has gained 10%.
International reactions have been swift, with Japan calling for de-escalation and South Korea expressing concern about potential trade disruptions.
As the situation develops, energy markets remain on high alert, with oil traders watching closely for signs of further military action or retaliatory measures by Iran.
