SRINAGAR: Oil prices rose sharply on Monday, hitting their highest levels since January, after the United States joined Israel in striking Iran’s nuclear facilities over the weekend, fuelling concerns over potential supply disruptions.
Brent crude climbed $1.92, or 2.49%, to $78.93 a barrel by 0117 GMT, while U.S. West Texas Intermediate (WTI) rose $1.89, or 2.56%, to $75.73. Both benchmarks had earlier jumped more than 3% to $81.40 and $78.40 respectively, before trimming gains.
The escalation followed U.S. President Donald Trump’s claim that Iran’s main nuclear sites were “obliterated” in joint strikes with Israel. Tehran has vowed retaliation.
Iran, the third-largest OPEC producer, is central to global oil flows, with roughly a fifth of the world’s crude passing through the Strait of Hormuz. Iran’s parliament reportedly approved a measure to close the strait—though such threats have not materialised in the past.
Analysts warned of growing risks to regional oil infrastructure. Sparta Commodities’ June Goh noted that even with alternate pipelines, a closure of the strait would leave export capacity short and deter shipping activity.
Goldman Sachs estimated that Brent could spike to $110 per barrel if oil flows through the strait were halved for a month, though it assumes no major long-term disruption.
Since the conflict began on June 13, Brent has gained 13% and WTI around 10%. Analysts cautioned that without a concrete supply disruption, the price rally may be temporary, with some long positions already unwinding.
Market analysts warn that any disruption to shipments through the Strait of Hormuz could send oil prices even higher, with some projecting Brent crude could approach $90 per barrel if Iranian exports are significantly curtailed. The heightened geopolitical risk has already added a premium to oil prices, with some estimates suggesting a $12 per barrel increase since the onset of the conflict.
Asian stock markets reacted negatively to the developments, with major indices falling on concerns over energy costs and regional stability. Economists caution that a prolonged conflict and sustained high oil prices could have a significant negative impact on global economic growth, particularly for energy-importing nations in Asia
