Strait of Hormuz Disruption Sends Oil Prices Soaring Amid Geopolitical Conflict

Oil prices surged on heightened geopolitical tensions after retaliatory attacks in the Strait of Hormuz disrupted shipping. The price of Brent crude rose by 9% while U.S. West Texas Intermediate increased by 8.8%. This disruption threatens global supply chains, further exacerbating oil price instability.

Oil prices skyrocketed by 9% on Monday as the shipping lanes through the crucial Strait of Hormuz faced disruptions due to retaliatory Iranian attacks. These events unfolded following bombings by Israel and the United States, leading to the death of Iran's Supreme Leader Ali Khamenei. Brent crude saw a jump to $82.37 a barrel, marking its highest level since January 2025 before settling at $79.78.

The U.S. West Texas Intermediate crude hit a peak at $75.33, recording a 12% increase, the highest since June, later stabilizing at $72.90. This volatility was triggered as sustained counterattacks damaged tankers, severely affecting oil shipments through the vital channel connecting the Gulf to the Arabian Sea.

Asian economies are bracing for potential supply shortages, with South Korea and India exploring alternate options. Prices saw a reduction after early Asian trade, as the market had already priced in a risk premium in response to the conflict. OPEC+ agreed to a slight production increase, while the International Energy Agency remains in contact with key Middle Eastern producers.

(With inputs from agencies.)