Global oil prices surged on Monday following escalating tensions in the Middle East after Iranian missile strikes disrupted shipping through the Strait of Hormuz, one of the world’s most critical energy chokepoints.
The turmoil came just days after coordinated attacks by Israel and the United States killed Iran’s Supreme Leader, Ayatollah Ali Khamenei, prompting swift retaliation from Tehran that has rattled commodity and financial markets worldwide.
Brent crude futures jumped as much as 13 per cent to US$82.37 per barrel (bbl) at their peak, the highest level since January 2025, before later easing to US$78.87/bbl by mid-morning GMT, still up US$6, or 8.2 per cent.
U.S. West Texas Intermediate (WTI) crude also climbed more than 12 per cent intraday to US$75.33 before retreating to US$72.17/bbl, a gain of US$5.15, or 7.7 per cent.
Traders described the session as one of the most volatile of the year, as risk premiums across energy markets rose sharply.
The weekend’s violence prompted severe disruption across Gulf waters, where at least three vessels were targeted near the Strait of Hormuz amid intensifying hostilities.
Iranian forces issued warnings to commercial traffic, heightening fears of a broader military confrontation that could endanger global energy security.
The Strait of Hormuz, a narrow maritime corridor bordered by Iran and Oman, handles roughly 20 per cent of the world’s oil and gas shipments.
The bulk of that supply originates from Saudi Arabia, Iraq, Kuwait, Iran, and the United Arab Emirates — bound primarily for key Asian markets including China and India.
According to shipping data and satellite imagery from monitoring platforms such as Kpler, more than 200 tankers, including crude oil and liquefied natural gas vessels, remained anchored outside the Strait late Sunday due to rising security concerns.
Traffic slowed markedly after Iran’s Islamic Revolutionary Guard Corps (IRGC) broadcast a chilling directive: “no ship is allowed to pass the Strait of Hormuz,” according to a report by Reuters.
The radio transmission, which circulated widely across maritime channels, underscored Tehran’s intent to assert control over the waterway following the loss of its supreme leader.
Three tankers from the UK and US had been “struck by missiles and are burning”, the IRGC claimed in a statement released Sunday night.
Although authorities in London and Washington have yet to comment publicly on the incident, officials confirmed they are monitoring the situation closely in cooperation with regional maritime security partners.
The UK Maritime Trade Operations Centre (UKMTO) reported two vessel strikes that caused damage, while an “unknown projectile” detonated near a third ship.
The agency described “multiple security incidents” and urged all ships navigating through affected zones “to transit with caution.”
One seafarer is reported to have died in the attacks, with confirmed damage to at least three tankers operating within Gulf waterways.
Several major oil producers and trading houses suspended tanker movements or rerouted vessels through alternative maritime lanes.
Regional ports tightened security protocols as warnings circulated about further “escalating risks for commercial traffic transiting Gulf waters”, echoing alerts from official agencies.
Brent crude’s rally lifted its year-to-date gain to more than 19 per cent, with WTI up roughly 17 per cent from last Friday’s levels.
Analysts said the spike reflected both immediate supply concerns and speculative activity as markets priced in potential escalation.
Some warned that a protracted conflict could drive prices toward three-digit territory if disruptions persist.
In response to the growing crisis, the Organisation of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, announced on Sunday that members had agreed to boost output by approximately 206,000 barrels per day, effective from April.
Analysts noted the move was intended to stabilise markets and reassure consuming nations facing tightening supplies.
International Energy Agency (IEA) director Fatih Birol said the organisation was closely coordinating with producers and member governments to manage potential shortages.
“The International Energy Agency is in touch with major producers in the Middle East,” he said, adding that “strategic reserves can be coordinated amongst developed countries during emergencies should further constraints develop around critical petroleum flows.”
Despite these assurances, energy traders remain on edge.
Any prolonged closure of the Strait of Hormuz could severely impact global supply chains, shipping insurance rates, and inflationary pressures worldwide.
