Oil Prices Surge Past $114 as Israel–Iran War Disrupts Global Energy Supply

Oil prices surge past $114 per barrel as the Iran–Israel war disrupts global supply and threatens shipping through the Strait of Hormuz, raising inflation fears worldwide

Global energy markets were shaken on Monday as oil prices surge past $114 per barrel for the first time since 2022, triggered by the escalating conflict between Iran and Israel. The intensifying war has raised fears of major disruptions to oil production and shipping routes across West Asia, sending shockwaves through financial markets worldwide.

The price of Brent crude, the international benchmark, climbed above $114 per barrel after trading resumed on the Chicago Mercantile Exchange. This marked a sharp 23% jump from its previous close of $92.69 on Friday. Meanwhile, West Texas Intermediate (WTI), the key U.S. crude benchmark, also surged to around $114 per barrel—about 25% higher than its Friday closing price of $90.90.

Analysts say the sharp rally highlights how quickly oil prices surge when geopolitical tensions threaten critical energy supply routes.

Strait of Hormuz Disruption Sparks Supply Fears

A key factor driving the market spike is the growing risk around the Strait of Hormuz, one of the world’s most important oil shipping lanes. According to research firm Rystad Energy, roughly 15 million barrels of crude oil—about 20% of global supply—normally pass through the narrow waterway every day.

However, the threat of missile and drone attacks has dramatically reduced tanker movement through the strait. The route is bordered by Iran and serves as a vital export channel for oil from countries including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, and the United Arab Emirates.

Production cuts have already begun in several Gulf countries as storage tanks fill due to limited export capacity. Meanwhile, airstrikes targeting oil and gas infrastructure across the region have worsened supply concerns.

War Expands as Energy Facilities Come Under Attack

The conflict has also expanded beyond military targets. Bahrain accused Iran of striking a desalination plant vital to drinking water supplies, while Israeli airstrikes reportedly hit oil depots in Tehran overnight.

Iranian officials said the strikes killed four people and damaged key petroleum facilities. Iranian parliamentary speaker Mohammad Bagher Qalibaf warned that the conflict’s impact on the oil industry could intensify if attacks continue.

The ongoing hostilities have already pushed oil prices sharply higher since March 1, when the United States and Israel launched strikes on Iranian targets. With Iran exporting about 1.6 million barrels of oil per day—primarily to China—any disruption could tighten global supply even further.

Inflation Concerns Shake Global Markets

The rapid jump in energy prices is fueling fears about global inflation and economic slowdown. In the United States, gasoline prices have climbed to $3.45 per gallon, about 47 cents higher than a week earlier, according to the American Automobile Association.

U.S. Energy Secretary Chris Wright said the spike may be temporary, predicting that fuel prices could fall back below $3 per gallon in the coming weeks.

Still, analysts warn that if crude remains above $100 per barrel for an extended period, the global economy could face significant pressure. As tensions continue to escalate across West Asia, oil prices surge remains one of the most closely watched indicators for markets and policymakers worldwide.