Oil prices leapt to new highs as traders weighed interruptions to Middle East production and shipping, driven by the Iran war and attacks on regional facilities. Brent traded above $100 and briefly climbed as high as $115 to $120 a barrel before easing below $110 after reports of steps to ease supply concerns.
As reported by AP, the international Brent benchmark stood at $107.97 after trading resumed, while West Texas Intermediate was about $106.22, both jumping roughly 16 to 17 percent from their Friday closes. Markets had already moved sharply, with the U.S. crude price rising 36 percent and Brent up 28 percent over the prior week, as reported by AP.
Financial markets in Asia reacted to the spike, with stocks tumbling broadly and falls of about 6 percent in South Korea and 4 to 5 percent in Japan reported in one account. President Trump, posting on Truth Social, described the higher oil prices as short term and said they were a small price to pay for US and world safety and peace.
Market Supply Effects And Economic Signals
Concerns focused on the Strait of Hormuz, which independent research firm Rystad Energy estimates normally carries about 15 million barrels a day, roughly one fifth of world oil. The waterway has been all but closed for more than a week, blocking shipments from major Gulf producers and constraining exports.
Producers in Iraq, Kuwait and the UAE have cut output as storage filled amid reduced export ability, and Iran, Israel and the United States have struck oil and gas facilities since the war began, adding to supply fears. Iran exports about 1.6 million barrels a day, mainly to China, a factor that may complicate markets if Iranian shipments remain disrupted, as reported by AP.
The surge has fed through to retail fuel prices. AAA reported a U.S. regular gasoline average near $3.45 a gallon and diesel about $4.60, each rising substantially over the prior week, as reported by AP. Energy Secretary Chris Wright said on CNN that U.S. pump prices would come back under $3 a gallon before long and suggested the shock could be measured in weeks rather than months, according to AP.
