Global oil prices have surged sharply as the escalating conflict involving Iran raises fears of major supply disruptions in the Middle East, a region responsible for a large share of the world’s crude exports.
Benchmark crude prices have climbed close to 30 percent since the latest escalation in hostilities. US West Texas Intermediate (WTI) rose to about $117.50 a barrel, up nearly 29 percent, while Brent crude reached roughly $117.70, marking a gain of almost 27 percent. The surge pushed prices above $100 per barrel for the first time since 2022.
The rally follows a series of military exchanges across the region. Israel reportedly struck a large fuel storage facility near Tehran, while Iran launched drone and missile attacks targeting infrastructure and US-linked interests. Reports also indicated a drone strike damaged a desalination plant in Bahrain, missile attacks hit Israel, and an Iranian counterattack killed US personnel stationed in Saudi Arabia.
Energy analysts say the spike reflects growing concerns about the safety of oil shipments from the Arabian Gulf. The region accounts for around one-third of the world’s seaborne crude exports and includes several of the largest oil producers such as Saudi Arabia, the United Arab Emirates, Iraq and Kuwait.
A key focus for traders is the Strait of Hormuz, the narrow waterway between Iran and Oman through which about 20 percent of the global oil supply passes each day. Around 20 million barrels of crude move through the strait daily, making it one of the most critical shipping routes in the global energy system.
“If the Strait of Hormuz were closed or significantly disrupted, oil prices could easily spike well above $150 per barrel,” said Jorge León, senior vice-president at energy consultancy Rystad Energy. He added that markets are already factoring in a substantial geopolitical risk premium.
Analysts at Goldman Sachs also warned that prolonged instability could drive prices even higher. In a research note, the bank said Brent crude could approach $130 per barrel if Gulf exports face sustained disruption or if Iranian production and shipping routes are affected.
The International Energy Agency estimates global oil demand currently exceeds 103 million barrels per day. With limited spare production capacity available worldwide, a major disruption could tighten supply rapidly.
Opec+, led by Saudi Arabia and Russia, has some spare capacity that could potentially offset supply losses. Analysts caution that increasing output and delivering it to global markets quickly could become difficult if transport routes in the Gulf face threats.
The rising oil prices are already influencing global markets. Higher crude costs are pushing up fuel and transportation expenses, raising concerns that inflation could return just as many economies were beginning to stabilise.
Energy traders are now closely monitoring tanker traffic through the Strait of Hormuz. Any disruption to shipping lanes or attacks on oil facilities could drive prices even higher.
Experts say that with tensions continuing to rise, oil markets are likely to remain highly sensitive to developments on the battlefield in the days ahead.
