Oil Jumps to $118, Up 29% as Middle East War Escalates

Global crude oil prices surged dramatically, jumping 29% to around $118/bbl, as the escalating conflict involving Iran, Israel, and the United States raised fears of major disruptions to Middle Eastern energy supply.

The sharp rally pushed oil prices well above the key $100/bbl psychological level, marking the highest levels since 2022 as markets reacted to growing risks to production and shipping across the region.

Earlier in the week, Brent crude had already been climbing steadily, closing Friday at $92.69/bbl, while WTI settled at $90.90/bbl, reflecting gains of roughly $22/bbl and $25.5/bbl respectively compared to pre-war levels.

Brent spikes above $116/bbl

The rally accelerated further during Monday’s intraday trading as geopolitical tensions intensified. Brent crude briefly surged above $116/bbl, the strongest level since July 2022, when global energy markets faced severe supply shocks during the Russia–Ukraine conflict. At the same time, the US benchmark WTI jumped sharply, reflecting strong bullish momentum across global oil markets.

Brent–WTI spread narrows

At the time of writing, Brent and WTI were trading close to $116–118/bbl, suggesting that the Brent–WTI spread, which typically ranges between $2–6/bbl in favor of Brent, has nearly disappeared as geopolitical risks dominate the market.

With disruptions in the Strait of Hormuz threatening global supply flows, strong export demand for US crude has pushed WTI prices closer to Brent levels.

Supply disruptions deepen

The sharp gains come as the conflict involving Iran, Israel, and the United States shows no signs of easing. The Strait of Hormuz, a crucial chokepoint responsible for transporting nearly one-fifth of global oil shipments, has faced severe disruptions, forcing producers across the Gulf to adjust output.

Reports indicate that Kuwait and the UAE have started reducing production as storage facilities fill rapidly due to halted tanker loadings, while Iraq began shutting in output last week. With vessels unable to move freely through Hormuz, oil cargoes are struggling to reach international markets, tightening global supply.

The escalation has also triggered attacks on energy infrastructure and raised fears of a broader energy shock. In the United States, retail gasoline prices have climbed to their highest levels since August 2024, increasing concerns about a potential resurgence in inflation.

Despite the market turmoil, US President Donald Trump signaled continued military pressure, stating in a social media post that short-term price increases are a “very small price to pay” for eliminating the Iranian nuclear threat.

Market watches further upside

Market analysts warn that the rally may continue if the conflict persists. The $100/bbl psychological level, once considered a major resistance point, is now seen as a potential base level if supply disruptions worsen.

With shipping through the Strait of Hormuz under severe strain and regional production disruptions mounting, global oil markets are increasingly pricing in the risk of a prolonged supply shock.

Stay ahead of market trends with the Credco app. For any queries, please reach out to us via WhatsApp at ‪+918448083211‬.