Rising tensions involving Iran have triggered a sharp jump in global oil prices, raising fresh concerns about the stability of energy markets and the wider global economy.
On Monday, Brent crude climbed past $115 per barrel, marking an increase of roughly 24 per cent compared to the end of last week. In the United States, West Texas Intermediate (WTI) crude also surged, reaching nearly $116 per barrel after rising about 28 per cent in a matter of days.
The spike in prices is largely linked to growing security risks in the Middle East, one of the world’s most important oil-producing regions. Of particular concern is the Strait of Hormuz, a narrow but critical shipping route through which around one-fifth of the world’s oil supply passes each day. With ongoing conflict and reports of attacks on vessels, many tanker operators are becoming increasingly cautious about using the route.
Tensions have also affected energy infrastructure in the region. Iranian authorities reported casualties after a strike on a storage facility in Tehran, which Israel says is connected to Iran’s military activities. The incident has added to fears that further attacks could disrupt oil production and supply chains.
At the same time, several Gulf producers, including Iraq, Kuwait and the United Arab Emirates, have reportedly reduced oil exports, adding pressure to an already tight global supply. Iran’s own exports, estimated at around 1.6 million barrels per day, could also face disruption. Much of Iran’s oil currently goes to China, meaning any interruption may force Beijing to look for alternative suppliers.
Natural gas prices have also edged upward, though the increase has been less dramatic than in oil markets.
The sudden surge in energy prices has unsettled financial markets. Japan’s Nikkei 225 index dropped more than seven percent on Monday, while other major markets also recorded losses. Economists warn that if oil prices remain above $100 per barrel for a prolonged period, the result could be higher inflation and slower economic growth worldwide.