Global crude oil prices surged past the $100 per barrel mark on Monday, recording their highest level since July 2022 as tensions in the Middle East continued to disrupt energy supplies.
Brent crude climbed by about 16 per cent to $107.56 per barrel, up from roughly $91 recorded on Friday. Similarly, West Texas Intermediate (WTI) rose by nearly 13.96 per cent to $103.59.
The spike in prices follows the continued shutdown of maritime traffic through the Strait of Hormuz due to the ongoing Middle East conflict, raising fears of the most severe energy disruption since the 1970s and posing risks to the global economy.
Market watchers have also speculated that the international oil benchmark could climb as high as $120 per barrel if the situation persists.
The Strait of Hormuz — a narrow channel linking the Persian Gulf with the Gulf of Oman and the Arabian Sea — is regarded as the only sea route through which Gulf oil and gas producers ship their energy supplies to global markets, making it one of the world’s most critical energy corridors.
According to a report by The Wall Street Journal, the disruption has already begun to drive up the cost of petrol and diesel while pushing mortgage rates and government borrowing costs higher in the United States.
“One week into President Trump’s war on Iran, the most severe shock to energy markets since the 1970s is cascading through the world economy,” the report reads.
“The disruption quickly fed into higher gasoline and diesel prices at the pump, and higher mortgage rates and borrowing costs for the U.S. government, endangering Trump’s economic priorities.
“To be sure, the U.S. has more shock absorbers this time around. Oil is a far smaller component of gross domestic product than it once was, and the U.S. has become a top energy exporter in its own right.”
Chris Wright said energy shipments would soon resume through the strategic waterway.
He attributed the price surge largely to uncertainty surrounding the duration of the conflict.
“Energy will flow soon,” Wright said, adding that the spike was driven by “the unknown that this could be some long… drawn-out crisis. But it won’t be”.
Despite that assurance, the Wall Street Journal noted that the economic impact of the disruption is expected to be particularly severe for countries in Europe and Asia.
“For decades, the U.S. military and its allies have spent billions of dollars ensuring the Strait of Hormuz stays open,” the publication said.
“Just 21 miles across at its narrowest stretch, and flanked to the northeast by a sworn enemy of the West, the channel between Oman and Iran is a superhighway for about a fifth of global supplies of oil and liquefied natural gas.
“Massive amounts of fertiliser sail through these waters, feeding crops on every continent.”
The report added that most vessels that have managed to leave the strait since the conflict began were carrying Iranian crude.
“Traders say crude markets could soar even higher if the strait doesn’t open within days, either with U.S. naval escorts or because shipowners think the danger has receded,” the publication said.
The crisis is also affecting other commodity markets. Aluminium prices have climbed to multi-year highs after some Middle Eastern smelters invoked force majeure — a legal clause that allows suppliers to suspend obligations when circumstances prevent delivery.
The ripple effects of the US-Iran conflict are also being felt in Nigeria, where filling stations have started gradually increasing petrol pump prices.
