Oil Prices Surge Amid Middle East Supply Disruptions and War Tensions

Oil prices climbed sharply on Monday as fears of supply losses intensified due to shipping disruptions in the Middle East, a consequence of the ongoing U.S.-Israeli conflict with Iran. Brent crude futures saw a rise of $1.71, or 1.6%, surging to $110.74 a barrel, while U.S. West Texas Intermediate crude futures gained $0.71, or 0.6%, trading at $112.25 per barrel.

The strategic Strait of Hormuz, a vital corridor transporting oil from Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, remains mostly closed due to Iranian attacks on shipping. This has led refiners, particularly in the U.S. and the UK North Sea, to seek alternative crude sources.

President Trump's recent threats against Iran on social media further escalated tensions. Yet some ships have managed passage through the Strait, signalling Iran's selective allowance for certain nations. Despite reported efforts for a ceasefire, the Wall Street Journal indicated that negotiations have stalled. OPEC+ members also face challenges in raising output amid supply disruptions, including recent Ukrainian attacks on Russia's Baltic Sea terminals.