Oil and natural gas prices surged as Israeli and U.S. strikes on Iran and retaliatory attacks by Tehran forced shutdowns of energy facilities across the Middle East and snarled shipping in the Strait of Hormuz, one of the world’s most critical maritime chokepoints.
A sustained rise threatens to undercut the global recovery, stoke inflation and lift U.S. gasoline prices — a political risk for President Donald Trump and Republicans ahead of November’s midterm elections.
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Brent crude futures jumped as much as 13% to $82.37 a barrel, the highest since January 2025, before easing to $77.79, up $4.92 or 6.75%, at 4 p.m. GMT. U.S. West Texas Intermediate (WTI) crude added $3.87, or 5.77%, to $70.89 after earlier spiking more than 12% to $75.33, the strongest level since June.
Natural gas benchmarks also soared. The Dutch front-month contract at the TTF hub — Europe’s benchmark — leapt more than 40% to 45.38 euros per megawatt hour on the Intercontinental Exchange. In Asia, LNG prices jumped almost 39% on Monday, with the S&P Global Platts Japan-Korea Marker at $15.068 per million British thermal units.
The supply shock rippled through infrastructure and shipping. Saudi Arabia shut its largest domestic oil refinery after a drone strike. Qatar halted liquefied natural gas production, and state-owned QatarEnergy was preparing to declare force majeure on LNG shipments. Around the Strait of Hormuz, at least 150 ships were reported stranded at anchor after a seafarer was killed and at least three tankers were damaged.
“While we do not know where these disruptions will end or how the conflict will ultimately resolve, the near-term result is likely to be heightened volatility in global energy markets and a potential rerouting of global oil and gas cargoes,” said Kenny Zhu, research analyst at Global X. He added that North American energy producers are positioned to hedge disruptions if they persist.
About one-fifth of global oil demand typically transits the Strait of Hormuz each day, along with significant volumes of diesel, gasoline and other refined fuels to Asian buyers including China and India. Roughly 20% of the world’s LNG also moves through the waterway. “While there is some overland access for crude oil out of the region, it is nowhere near sufficient to replace flows through the Strait,” Morningstar analysts said.
Oil pared some gains as trading progressed, which analysts attributed to a risk premium that had already been priced in. Despite the shock, the International Energy Agency and others still see ample supply this year, with additional barrels from the United States, Guyana and OPEC+ expected to outpace global demand growth. Even so, as of Friday’s close, Brent was up more than 19% for the year and WTI about 17%.
OPEC+ on Sunday agreed to raise output by 206,000 barrels per day in April. Every OPEC+ producer is essentially pumping at capacity except Saudi Arabia, said Helima Croft, an analyst at RBC Capital. Visible oil inventories remain near their historical median, equivalent to roughly 74 days of demand, according to a Goldman Sachs note.
Markets, for now, are treating the escalation as serious but not yet systemic. “Markets are acknowledging the seriousness of the conflict, but are also signalling that, for now, this is a geopolitical shock, not a systemic crisis,” said Priyanka Sachdeva, senior analyst at Phillip Nova.
Banks see a wide range of outcomes. Citi expects Brent to trade between $80 and $90 this week as the war continues. JPMorgan warned that a three- to four-week squeeze on traffic through Hormuz could force Gulf producers to shut in output and propel Brent above $100.
The path from here hinges on how long the disruptions last and whether damage to infrastructure and shipping lanes worsens. For consumers — and policymakers — the stakes are high: any protracted spike in crude and gas prices would ripple from fuel pumps to food shelves, sharpening the trade-offs between fighting inflation and sustaining growth.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
