US Vs Iran: Oil surges 9% as war fears grip markets

Oil prices jumped sharply on Monday, while global stock markets fell, due to rising tensions between the United States, Israel, and Iran. Investors fear the conflict could disrupt oil supply in the Middle East.

In early trading, West Texas Intermediate (WTI), the US light crude, rose to $72.79 per barrel from about $67 on Friday, an increase of 8.6 per cent. Brent crude, the international benchmark, climbed 9 per cent to $79.41 per barrel from $72.87, reaching a seven-month high.

The spike followed US and Israeli attacks on Iranian targets, with Iran retaliating with missile strikes on US and Israeli military positions. Traders worry that oil exports from Iran and other key Middle Eastern countries could slow down or stop if the conflict continues.

US President Donald Trump said military operations would continue until US goals are achieved. He also announced that US forces have sunk nine Iranian Navy ships.

The conflict has reportedly killed over 250 people in Iran, including top military leaders and its clerical leader Ayatollah Ali Khamenei. Reports also indicate 185 schoolgirls died in missile strikes. The US confirmed three American deaths, while Israel reported 10 citizens killed by Iranian missiles.

Focus on the Strait of Hormuz

Attention is on the Strait of Hormuz, a key shipping route for about one-fifth of the world’s seaborne oil. Tankers are gathering on both sides of the strait due to fears of attacks and insurance issues. Two vessels were reportedly attacked on Sunday.

Jorge Leon, head of geopolitical analysis at Rystad Energy, said: “Traffic through the Strait of Hormuz is nearly halted, preventing 15 million barrels of crude per day from reaching markets. Unless tensions ease quickly, oil prices could rise further.”

Higher oil prices usually increase costs for consumers, affecting petrol, groceries, and other essentials. In Nigeria, a prolonged conflict could impact the value of the local currency and raise the cost of living.

OPEC+ Response

Amid the crisis, eight OPEC+ members including Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman planned to increase oil output by 206,000 barrels per day in April, more than analysts expected.

This move aims to reduce supply shocks, but ongoing disruptions in the Strait of Hormuz may still keep prices high.