Oil prices rose sharply Monday as U.S. and Israeli attacks on Iran, along with retaliatory strikes involving Israel and U.S. military installations around the Gulf, pushed traders to price in disruptions to global energy supply chains. Traders focused on whether attacks would slow or grind to a halt oil exports from Iran and other Middle East sources, with shipping disruptions—including attacks involving vessels traveling through the Strait of Hormuz—raising concerns about the flow of crude to world markets.
Early Monday, West Texas Intermediate, the U.S. benchmark for light, sweet crude, was selling for $72.79 a barrel, up 8.6% from about $67 on Friday, according to data from CME Group. Brent crude, the international benchmark, was trading at $79.41 per barrel early Monday, up 9% from $72.87 on Friday, FactSet said, with that Friday level described as a seven-month high.
Energy-market participants linked the price gains to the strategic role of the Strait of Hormuz, the narrow mouth of the Persian Gulf. Rystad Energy said roughly 15 million barrels of crude oil per day—about 20% of the world’s oil—ship through the strait, making it the most critical chokepoint for global oil trade. The same bottleneck also affects natural gas and the logistics for deliveries that depend on tanker routes through the Gulf.
The impact on consumers could extend beyond crude prices, with higher global energy prices typically translating into higher gasoline costs at the pump. The report noted that higher energy prices can also flow into broader consumer costs, including groceries and other goods, at a time when many consumers are already feeling the effects of elevated inflation.
Rystad Energy’s geopolitical analysis said the market concern is less about spare capacity on paper than about whether barrels can actually move through the Gulf. In an email, Jorge León, Rystad’s senior vice president and head of geopolitical analysis, said, “Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” adding that if Gulf flows are constrained, additional production would provide limited immediate relief and that access to export routes would matter more than headline output targets.
The report also pointed to recent disruption history around the strait. It said Iran temporarily shut down parts of the Strait of Hormuz in mid-February for what it described as a military drill, which the report said led oil prices to jump about 6% in the days that followed. Against that backdrop, the oil market reaction in early March reflected renewed concerns about whether attacks would restrict tanker traffic and exports long enough to tighten global supplies.
Even with those concerns, oil producers moved to increase output in a plan tied to OPEC+ members’ earlier decisions. The report said eight countries in the OPEC+ group announced they would boost production of crude on Sunday, including the Organization of the Petroleum Exporting Countries, which said it would increase production by 206,000 barrels per day in April—more than analysts had been expecting. The report listed Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman among those boosting output.
The report said Iran exports roughly 1.6 million barrels of oil a day, mostly to China, and that disruptions could force buyers to look elsewhere for supply—another factor that traders considered in pricing. It also noted that China has ample strategic oil reserves and could increase imports from Russia if Iranian exports are disrupted.