Oil Prices Skyrocket Amid Geopolitical Tensions and Supply Cuts

Oil prices have surged over $119 a barrel, driven by supply cuts and geopolitical tensions involving the U.S., Israel, and Iran. Major oil contracts experienced significant price jumps, indicating supply shortages. Production disruptions affect worldwide fuel prices, as geopolitical conflicts escalate.

On Monday, oil prices soared past $119 a barrel, a level unseen since mid-2022, driven by significant supply cuts and fears of shipping disruptions amid escalating tensions involving the U.S., Israel, and Iran.

Brent crude futures rose $8.77 or 9.46% to $101.46 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed $7.92 or 8.71% to $98.82 at 1339 GMT. Earlier, Brent reached $119.50 a barrel, marking a record one-day price jump, with WTI peaking at $119.48.

Several key producers, including Saudi Aramco, have begun reducing output, exacerbating supply shortages. Disruptions at the Strait of Hormuz and geopolitical shifts, such as Mojtaba Khamenei's appointment as Iran's Supreme Leader, compound market volatility. The situation poses potential long-term impacts on global fuel prices, despite efforts to tap strategic reserves.

(With inputs from agencies.)