Oil Prices Surge Amid Middle East Conflict

Oil prices saw a dramatic increase due to reduced supplies from major producers and fears of ongoing disruptions amid the U.S.-Israeli conflict involving Iran. Prices could remain high even if the conflict ends soon, as damaged facilities and disrupted logistics linger.

Oil prices spiked on Monday by over 15%, reaching levels unseen since mid-2022, as major producers slashed supplies amidst the U.S.-Israeli conflict with Iran. Brent crude futures increased by $15.51, or 16.7%, hitting $108.20 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by $14.23, or 15.7%, to $105.13.

The shipping disruptions caused by heightened security risks have significantly impacted tanker movements, particularly affecting Asian buyers reliant on Middle Eastern crude. This crisis centers around the Strait of Hormuz, through which a substantial portion of the global oil supply is transported.

Further driving up prices was the appointment of Mojtaba Khamenei as Iran's leader, suggesting that hardliners maintain control in Tehran, exacerbating tensions. Analysts warn that unless the Strait of Hormuz reopens and regional tensions ease, oil prices may continue to climb.

(With inputs from agencies.)