Oil prices surged Monday as escalating conflict between the US and Iran raised concerns over energy supply disruptions. US benchmark crude jumped 5.9% to $71.00 per barrel, with Brent crude up 6.2% to $77.38.
Traders are anticipating potential slowdowns or halts in oil supplies from Iran and the Middle East. Attacks targeting vessels in the Strait of Hormuz, a critical artery for global energy flows, threaten export capabilities. Analysts warn that prolonged disruptions could significantly impact oil and natural gas prices globally, affecting all markets as energy is a fundamental input for production.
Iran exports approximately 1.6 million barrels of oil daily, primarily to China. While China has substantial oil reserves and could potentially increase imports from Russia to offset any decline in Iranian supply, the immediate market reaction reflects heightened supply insecurity.
In other markets, gold prices rose 2.4% amid the uncertainty. US stock futures and Asian shares opened lower, reflecting broader market anxieties.