Global oil markets have been jolted as Brent crude surged past $100 a barrel following the United States and Israel’s military campaign against Iran, raising fears of a major disruption to global energy supplies.
The international benchmark jumped more than 30 percent on Sunday and briefly reached $119 per barrel, the highest level since Russia’s invasion of Ukraine in 2022. Prices later eased to about $110 after reports that Group of Seven finance ministers were preparing emergency discussions on releasing strategic petroleum reserves with support from the International Energy Agency.
Energy markets have reacted sharply to escalating conflict in the Middle East, where retaliatory measures and attacks on infrastructure have created uncertainty around the flow of oil through one of the world’s most critical shipping routes.
Oil Prices Spike as Strait of Hormuz Disruption Threatens Supply
The surge follows joint strikes launched by the United States and Israel against Iran on February 28. Since the beginning of the military campaign, crude prices have climbed roughly 50 percent.
In response, Iran has effectively halted shipping in the Strait of Hormuz, a narrow maritime corridor through which about one fifth of the world’s oil supply passes. The disruption has created a backlog of shipments and forced several major producers to slow output.
Iraq, the United Arab Emirates, and Kuwait, three key members of the Organization of the Petroleum Exporting Countries, have cut production as oil tankers struggle to move through the region.
The conflict has also expanded to energy infrastructure. Iranian authorities have been blamed for several attacks on energy facilities across the Gulf, including sites in Qatar, Saudi Arabia, and Kuwait.
On Saturday, Israel launched air strikes targeting Iran’s oil infrastructure for the first time since the conflict began. Iranian state media reported that four oil storage facilities and an oil products transfer centre in Tehran and the province of Alborz were hit.
US Officials Downplay Impact as Inflation Concerns Grow
Despite the surge in global energy prices, US President Donald Trump played down the economic impact.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump said in a post on Truth Social. “ONLY FOOLS WOULD THINK DIFFERENTLY!”
US Secretary of Energy Chris Wright also sought to reassure consumers, telling CBS News’ Face the Nation that any rise in petrol prices would be “temporary”.
Still, economists warn that prolonged disruptions in global energy supply could push inflation higher and slow economic growth worldwide.
The International Monetary Fund estimates that every sustained 10 percent rise in oil prices leads to a 0.4 percent increase in inflation and a 0.15 percent reduction in global economic growth.
Regional producers have also sounded alarms. In an interview with the Financial Times, Qatar’s Energy Minister Saad al-Kaabi warned that producers across the Gulf could soon be forced to halt output if shipping disruptions persist.
“Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” al-Kaabi said. “All exporters in the Gulf region will have to call force majeure.”
Iran’s Revolutionary Guard Corps has warned it could target additional energy infrastructure across the region, raising concerns that oil prices could climb as high as $200 per barrel if hostilities intensify.
