Oil prices soared past $114 a barrel on Monday, marking the first time since 2022 that benchmarks for international and U.S. crude have reached this level. Brent crude, the global benchmark, surged 23% from its previous closing price, while West Texas Intermediate, the U.S. standard, climbed 25%.
The sharp increases are directly linked to the escalating conflict involving Iran. Reports indicate that civilian infrastructure, including water supply plants and oil depots, has been targeted. This intensification follows a week where U.S. crude prices rose 36% and Brent crude gained 28%.
The geopolitical turmoil is significantly impacting the flow of oil from the Persian Gulf. The Strait of Hormuz, a critical chokepoint through which approximately 20% of the world's daily oil shipments pass, is facing severe disruption due to the threat of Iranian attacks. Tanker traffic through the vital waterway has all but ceased.