Global oil markets swung violently Monday as the escalating conflict between the US and Iran disrupted one of the world’s most important energy corridors, briefly sending crude prices soaring before easing on hints the conflict might end soon.
The price of benchmark Brent crude oil surged to USD119.50 per barrel, its highest level since the months after the Russian invasion of Ukraine. West Texas Intermediate crude oil hit as high as USD119.48.
Oil later slipped below USD90 after US President Donald Trump suggested the war could be nearing its end.
Even with the pullback, crude remains sharply above the roughly USD70 per barre seen before the US and Israel launched air strike on Iran. That has resulted in higher petroleum prices at the pump worldwide, spurring long queues and fears of a crisis that could rival 1970s oil shock that saw supply shortages that slowed global growth.
At the center of market anxiety is the Strait of Hormuz, the narrow passage off Iran’s coast that carries roughly one fifth of global oil shipments each day. Tanker traffic through the strait has slowed sharply amid fears of missile and drone attacks.
Major producers including Iraq, Kuwait and the United Arab Emirates have already trimmed output as export bottlenecks strain storage capacity and logistics.
The next few weeks will likely determine whether the current spike proves temporary volatility or the start of a deeper global energy shock.
