Oil Prices Jump Over 20% Above $110 As Iran Conflict Disrupts Middle East Supplies

Global crude oil prices surged more than 20% and crossed $110 per barrel on Monday as the expanding conflict involving the United States, Israel and Iran disrupted oil supplies from the Middle East and raised concerns about shipping through the Strait of Hormuz, according to Reuters.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Brent crude futures rose as much as $18.35, or 19.8%, to $111.04 per barrel and were trading around $107.93 per barrel at 00:14 GMT on Monday. U.S. benchmark West Texas Intermediate (WTI) crude futures increased $16.50, or 18.2%, to about $107.40 per barrel after earlier touching $111.24, Reuters reported.

The price surge follows strong gains last week when Brent crude climbed 27% and WTI rose 35.6%, reflecting rising supply concerns in global energy markets.

Middle East Supply Disruptions

Several Middle Eastern producers have started cutting oil output as the conflict disrupted exports and filled storage facilities.

According to Reuters, Iraq’s crude oil production from its main southern oilfields has fallen about 70% to nearly 1.3 million barrels per day because exports through the Strait of Hormuz have been disrupted.

Kuwait Petroleum Corporation also began reducing oil output on Saturday and declared force majeure on shipments, although the company did not disclose the exact scale of the production cut.

Earlier, Qatar reduced liquefied natural gas shipments as transport disruptions affected exports from the Gulf region.

The Strait of Hormuz is a critical global oil transit route through which roughly one-fifth of the world’s oil supply is typically shipped, according to global energy market estimates cited by Reuters.

Oil Infrastructure And Shipping Risks

Oil infrastructure in the region has also been affected during the conflict.

The Fujairah Media Office in the United Arab Emirates reported that a fire broke out in the Fujairah oil industry zone after debris fell in the area, though no injuries were reported. Saudi Arabia’s Defence Ministry said it intercepted a drone heading toward the Shaybah oilfield.

According to Reuters, storage facilities in several producing countries are nearing capacity as exports remain disrupted.

Analysts cited by Reuters said producers such as the United Arab Emirates and Saudi Arabia may also be forced to reduce output if export disruptions continue.

Impact On Global Markets

The sharp increase in crude oil prices has triggered volatility across global financial markets.

Asian stock markets declined in early trading on Monday. Japan’s Nikkei 225 fell more than 7%, Hong Kong’s Hang Seng index dropped over 3%, and Australia’s ASX 200 declined more than 4%, according to Reuters.

South Korea’s Kospi index dropped more than 8%, triggering a 20-minute trading halt through a circuit breaker mechanism designed to limit sharp market movements.

The ongoing conflict is disrupting energy infrastructure, supply chains, and also shipping lanes. Global markets are watching the Middle East situation closely.

Several Gulf countries have already reported production cuts and problems with exports. The rise in crude oil prices is a sign that the global energy supply is getting tighter because of the ongoing political tensions in the region.