Oil prices surged in early Asian trading Monday, triggered by escalating geopolitical tensions after U.S. airstrikes on Iranian nuclear sites heightened fears of Middle East supply disruptions. Despite the initial rally, crude later eased off its peak levels.
By 00:05 GMT, Brent crude futures for August delivery were up 2.4% at $79.00 per barrel, while West Texas Intermediate (WTI) gained 2.5% to trade at $73.84. Both benchmarks briefly spiked nearly 4%, reaching their highest levels in four months, with Brent nearing $81 per barrel at its peak.
Market volatility followed news of U.S. strikes over the weekend targeting Iran’s major nuclear facilities. In response, Iran threatened retaliation, raising concerns about the broader implications for regional stability and energy exports.
Reports from Iranian state media indicated Tehran might move to block the Strait of Hormuz—a critical maritime route that facilitates a significant portion of the world’s oil shipments. Such a blockade could severely restrict global energy flows and spark broader market disruptions.
The renewed military confrontations between Iran and Israel, now in their 11th day, have already fueled oil market volatility. Heightened tensions between Tehran and Washington could also trigger new U.S. sanctions on Iranian oil exports, potentially straining supplies to Asia and Europe.
Market watchers are closely monitoring how Iran will respond in the coming days. Unconfirmed reports have suggested possible targeting of U.S. military assets in the region, adding to the geopolitical risk premium in oil pricing.
Analysts at ANZ described the U.S. actions as a “major escalation” and forecast that oil prices may stabilize in the $90 to $95 per barrel range if the situation continues to deteriorate. They also warned of an increased risk of supply chain disruption through the Strait of Hormuz and viewed renewed diplomatic talks over Iran’s nuclear program as highly unlikely in the near term.
Leave a Reply