Oil prices surge over 8% as Iran-Israel-US war escalates
Guwahati: Oil prices climbed sharply on Monday as escalating war between Iran, Israel and the United States triggered fresh concerns over global energy supplies.
Brent crude futures for May delivery were trading 8.34% higher at $78.95 per barrel as of 12:20 p.m., breaching a more than one-year high. During intraday trade, the benchmark briefly surged nearly 12% to touch $81.50 per barrel.
U.S. West Texas Intermediate (WTI) crude was also higher, rising 7.16% to $71.82 per barrel.
The sharp rally followed heightened fears of supply disruptions after Tehran called for the closure of the Strait of Hormuz in the wake of the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei. The strategic waterway accounts for roughly one-fifth of global crude oil flows, making it critical to international energy markets.
Analysts at S&P Global Commodities at Sea (CAS) noted that shipping activity through the Strait had declined by 40–50% as of 7:30 p.m. (UTC) on February 28, signalling growing logistical disruptions.
Markets were already bracing for a supply shock as the conflict intensified, with reports of U.S. strikes on Iranian targets and retaliatory actions widening the regional confrontation.
In a parallel development, eight OPEC+ members — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman agreed on Sunday to increase oil output by 206,000 barrels per day, a move seen as an attempt to stabilise markets amid volatility.
Fatih Birol, Executive Director of the Paris-based International Energy Agency (IEA), said the agency was “actively monitoring events in the Middle East and the potential implications for global oil and gas markets and trade flows.”
“Markets have been well supplied to date,” Birol said, suggesting that current inventories may cushion immediate shocks.
However, with geopolitical tensions intensifying and the Strait of Hormuz emerging as a potential flashpoint, traders remain on edge over the possibility of prolonged disruptions to global oil supply.