Oil prices jumped about 9% on Monday after shipping traffic in the Strait of Hormuz was disrupted by retaliatory attacks that followed earlier strikes, raising broad concerns over supply security in one of the world’s most critical oil transit routes.
Brent crude futures climbed as much as 13% to reach 82.37 dollars per barrel, the highest level since January 2025, before trimming gains to trade up 6.91 dollars or 9.5% at 79.78 dollars per barrel. US West Texas Intermediate crude rose to 75.33 dollars during trading, up more than 12% and marking its highest level since June, before easing to 72.90 dollars with an 8.8% gain.
The strong rally followed damage to oil tankers and a sharp disruption to shipments through the Strait of Hormuz, which connects the Arabian Gulf to the Arabian Sea. Roughly one fifth of global oil demand passes daily through the waterway from Saudi Arabia, the United Arab Emirates, Iraq, Iran and Kuwait, along with diesel, jet fuel and gasoline cargoes bound for key Asian markets such as China and India. Shipping data indicated that more than 200 vessels, including oil and liquefied natural gas carriers, anchored outside the strait, while three tankers were damaged and one crew member was killed in attacks reported on Sunday.
Analysts note that any prolonged closure of the strait would likely push prices higher and tighten supply. However, some brokerage houses pointed out that extended export disruptions could also weigh on the revenues of the exporting country and strain relations with major importers such as China, potentially limiting the duration of the crisis. At the same time, several Asian economies began assessing their stockpile levels and alternative supply options. South Korea signaled readiness to release reserves if disruptions persist, while India is evaluating alternative shipping routes.
Despite the sharp surge at the start of Asian trading, prices later pared part of their gains as investors incorporated a geopolitical risk premium into valuations. Brent had already risen more than 19% since the beginning of the year through Friday’s close, while West Texas Intermediate gained about 17% over the same period.
Amid these developments, OPEC Plus agreed to a modest output increase of 206000 barrels per day for April. Estimates suggest that most producers are operating near maximum capacity, with limited spare supply outside Saudi Arabia. The International Energy Agency confirmed it is in contact with major Middle Eastern producers and stands ready to coordinate the release of strategic reserves among industrialized nations if necessary.
Data show that visible global oil inventories stand at about 7.827 billion barrels, covering roughly 74 days of demand, a level close to the historical average. Citi analysts expect Brent to trade between 80 and 90 dollars per barrel this week if tensions persist, while outlining a potential de escalation scenario within one to two weeks should leadership changes or diplomatic containment emerge.
Analysts also warned that US gasoline prices could move above 3 dollars per gallon due to higher crude costs, posing a potential political challenge ahead of the November midterm elections. US gasoline futures rose as much as 9.1%, reaching their highest levels since July 2024 before trimming gains.
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