Singapore: Crude oil prices surged sharply in Asian trading on Monday amid escalating tensions in the Middle East following US and Israeli military strikes on Iran.
Brent crude futures jumped by around 13 percent in early trade to rise above $82 per barrel, up from Friday’s close of $72. Meanwhile, US benchmark West Texas Intermediate (WTI) climbed nearly 10 percent to cross $70 per barrel.
The rally followed last week’s gains, when prices had already firmed in anticipation of possible military action. Market concerns intensified over potential disruptions to maritime traffic through the Strait of Hormuz, a critical shipping route through which roughly 20 percent of global oil supplies pass.
Reports suggested that the key waterway was partially disrupted, although some Chinese and Iranian vessels were said to have transited the route. Major global shipping companies have reportedly suspended voyages through the corridor due to security concerns and soaring insurance premiums.
Energy analysts warned that a prolonged blockade of the Strait of Hormuz could significantly tighten global oil supply. Jorge Leon of Rystad Energy said in a note that closure of the route could result in a loss of 8 to 10 million barrels per day (bpd) of crude supply, even if alternative infrastructure is utilised.
Amena Bakr, head of Middle East and OPEC+ research at Kpler, said insurance costs were becoming prohibitive and projected that oil prices could climb toward $90 per barrel if instability persists.
Although OECD countries maintain emergency oil reserves equivalent to at least 90 days of net imports, analysts cautioned that strategic stockpiles may not fully offset a sustained supply disruption. Prices above $100 per barrel cannot be ruled out if tensions escalate further.
Gas markets were also expected to react, as Qatar remains one of the world’s leading exporters of liquefied natural gas, raising concerns over renewed inflationary pressures globally.
Economists warned that prolonged high energy prices could adversely affect global growth. The last time oil prices surpassed $100 per barrel was during the early phase of the Ukraine conflict, triggering sharp rises in fuel and energy costs worldwide.
Analysts noted that sustained increases in oil, gas and shipping costs could weigh heavily on economic activity, particularly if disruptions extend beyond a short-term period.