Oil jumps 8% as Iran conflict disrupts Middle Eastern flows

Oil prices jumped sharply after retaliatory Iranian attacks disrupted shipping in the Strait of Hormuz, following weekend strikes by Israel and the U.S. that killed Iranian Supreme Leader Ali Khamenei. Brent crude briefly rose 13% to $82.37 per barrel, its highest since January 2025, before retreating to $78.87 (+8.2%). U.S. WTI reached an intraday high of $75.33, later up 7.7% at $72.17.

Shipping disruptions forced more than 200 vessels, including oil and LNG tankers, to anchor outside the strait. Three tankers were damaged and one seafarer killed, highlighting risks to global supply. On a typical day, roughly one-fifth of the world’s oil demand passes through the strait from Saudi Arabia, UAE, Iraq, Iran, and Kuwait.

Analysts said the price surge reflects uncertainty over the conflict’s scale and duration, but for now represents a geopolitical shock rather than a systemic crisis. Early Monday gains were partially pared, as some risk premium had already been priced in.

OPEC+ announced a 206,000 barrels-per-day production increase for April, though most producers are operating near capacity. The International Energy Agency is coordinating with Middle Eastern producers and may release strategic petroleum reserves if needed. Global visible inventories stand at 7.827 million barrels, enough for 74 days of demand, near historical median levels.

Citi analysts expect Brent to trade between $80 and $90 per barrel this week amid the ongoing tensions. U.S. gasoline futures surged as much as 9.1% to $2.496 per gallon, their highest since July 2024, potentially pushing retail prices above $3 per gallon—a politically sensitive issue ahead of the U.S. midterm elections.