Global oil prices surged during the early week trading session after attacks involving the U.S., Israel, and Iran shook global energy supply chains, particularly in the Persian Gulf region.

Traders are concerned that oil supplies from Iran and Middle Eastern nations could slow down or be completely disrupted. Attacks in the region, including incidents targeting two vessels transiting the Strait of Hormuz — the world's most vital oil shipping route — have increased risks to energy exports.

Oil prices rise nearly 9%

  • U.S. West Texas Intermediate (WTI) crude traded at $72.79 per barrel, up 8.6% from approximately $67 on Friday (according to CME Group).
  • Brent crude — the international benchmark — reached $79.41 per barrel, a 9% increase from the previous $72.87, hitting a seven-month high (according to FactSet).

Energy experts noted that if the attacks persist, crude oil and retail gasoline prices could continue to rise, putting further pressure on global inflation.

Strait of Hormuz – A strategic bottleneck

Approximately 15 million barrels of oil per day, equivalent to 20% of global supply, pass through the Strait of Hormuz, according to Rystad Energy. This maritime route transports oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE, and Iran.

Iran previously temporarily closed part of the strait in mid-February during a military exercise, causing oil prices to rise by about 6% in the following days.

OPEC+ increases production but impact is limited

Eight nations within the OPEC+ alliance announced they would increase production by 206,000 barrels per day starting in April, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman. However, analysts suggest that if traffic through the Persian Gulf is restricted, the production increase may not be enough to offset transport disruptions.

Iran currently exports about 1.6 million barrels of oil per day, primarily to China. If this supply is cut, China may have to find alternative sources, increasing pressure on energy prices.

Higher energy prices mean consumers may have to pay more for gasoline, food, and essential goods while inflation remains high.