Crude oil prices rocketed above $100 per barrel on Sunday evening and into Monday, marking the first breach of that psychological level since Russia’s 2022 invasion of Ukraine, as the ongoing U.S.-Israeli war with Iran continues to choke global energy supplies through disruptions in the Strait of Hormuz.
West Texas Intermediate (WTI) futures climbed as high as around $119 before easing, trading up roughly 13-15% in early Monday sessions near $102-$105 per barrel in some reports, while global benchmark Brent surged even more sharply hitting peaks near $119-$120 and settling higher around $106-$108, reflecting gains of 15% or more in a single day. The explosive move came after already strong weekly advances driven by fears of prolonged shipping halts and production threats in the Middle East.
The Strait of Hormuz, a vital chokepoint for about one-fifth of the world’s oil flows, has seen tanker traffic severely curtailed amid the conflict, amplifying supply concerns and sending shockwaves through commodity markets. Some producers have reportedly cut output, while insurers and shippers pull back, exacerbating the squeeze.
U.S. President Donald Trump downplayed the immediate pain, posting on Truth Social that the short-term spike in oil prices was “a very small price to pay” for U.S. and global “safety and peace,” emphasizing the destruction of Iran’s nuclear threat as the priority. He insisted prices would “drop rapidly” once the situation resolves.
U.S. Energy Secretary Chris Wright struck a note of cautious optimism in a CNN interview, suggesting the Strait’s closure might last “a few weeks, not months,” and that traffic could resume soon after U.S. actions neutralized Iran’s ability to threaten tankers.
Geopolitical ripples extended beyond energy: Iran named Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, as its new supreme leader, according to reports from state media and clerical sources, potentially signaling a hardline continuity amid the crisis. The U.S. embassy in Riyadh issued a departure order for non-emergency staff, highlighting regional risks.
Financial markets reacted sharply, with Dow futures dropping nearly 900 points at one stage, S&P 500 and Nasdaq futures falling around 1.6-1.7%, and Asian stocks sinking before paring losses on rumors of Saudi Arabia releasing spot crude to ease pressure. Gold dipped amid a stronger dollar and shifting rate outlooks.
Diplomatic efforts are ramping up: President Trump is scheduled to meet Chinese President Xi Jinping from March 31 to April 2 amid tensions over the war and trade. China’s top diplomat Wang Yi reiterated calls for a ceasefire, describing the conflict as one that “should not have happened” and benefits no one. The G7 group is preparing an emergency meeting to discuss the crisis, including potential coordinated releases from emergency oil reserves.
The surge underscores the fragility of global energy markets in the face of Middle East instability, with analysts warning of risks to inflation, growth, and even recession if disruptions persist. For now, the oil shock has triggered a broad risk-off mood, though hopes for de-escalation or alternative supplies offer some counterbalance. Traders remain on high alert as the conflict shows little sign of abating.
