Oil prices soar to levels not seen in years as war in Iran intensifies
Key Takeaways
- Brent crude surged to as high as $119.50 per barrel
- War in Iran intensified, threatening Middle East oil production and shipping
- Rising oil prices pummeled financial markets
Iran conflict and oil markets
Oil prices surged as the Iran war intensified in its second week, threatening production and shipping in the Middle East and rattling financial markets.
“Alex Veiga, Associated PressAlex Veiga, Associated Press Elaine Kurtenbach, Associated PressElaine Kurtenbach, Associated Press Leave your feedback Oil prices continued to soar on Monday as the Iran war intensified, threatening production and shipping in the Middle East and pummeling financial markets”
Brent crude jumped as high as $119.50 per barrel early Monday before trading above $101 per barrel (up 9%).
West Texas Intermediate climbed above $119.48 per barrel before falling back closer to $100.
The article reports that Iran named Ayatollah Mojtaba Khamenei to succeed his late father as supreme leader amid heavy U.S. and Israeli bombardment.
The article also says oil depots in Tehran smoldered following overnight strikes by Israel.
Strait of Hormuz disruption
The conflict has disrupted supply chains through the Strait of Hormuz, with independent research firm Rystad Energy saying roughly 15 million barrels — about 20% of the world's oil — typically move through the strait each day.
The threat of Iranian missile and drone attacks has largely stopped tankers from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran from transiting the strait.
Iraq, Kuwait and the UAE have cut oil production as storage tanks fill.
The article says Iran, Israel and the United States have attacked oil and gas facilities since the war started.
Bahrain accused Iran of striking a desalination plant and said an Iranian attack set its refinery complex ablaze.
Bahrain's national oil company declared force majeure for its shipments.
Global energy cost surge
Governments and markets are weighing responses while the surge in energy costs ripples through economies.
“Alex Veiga, Associated PressAlex Veiga, Associated Press Elaine Kurtenbach, Associated PressElaine Kurtenbach, Associated Press Leave your feedback Oil prices continued to soar on Monday as the Iran war intensified, threatening production and shipping in the Middle East and pummeling financial markets”
The Group of Seven said it had decided against using strategic reserves for now.
French Finance Minister Roland Lescure said, "We're not there yet," and added the G7 was ready to take coordinated steps such as strategic stockpiling.
President Donald Trump downplayed tapping the U.S. Strategic Petroleum Reserve, saying U.S. supplies were ample and prices would soon fall.
The article notes Iran exports roughly 1.6 million barrels a day, mostly to China.
Chinese Foreign Ministry spokesman Guo Jiakun said, "All parties have their responsibility to ensure stable and smooth energy supplies."
Higher energy costs have pushed fuel prices up and strained markets.
The U.S. average price for a gallon of regular gasoline rose to $3.48 as of early Monday, up nearly 50 cents from a week earlier.
Diesel averaged about $4.66 a gallon, a weekly increase of more than 80 cents.
U.S. natural gas traded around $3.34 per 1,000 cubic feet, up from $3.19.
South Korea's Kospi tumbled 6% to 5,251.87.
The spike has led to long lines at filling stations across Southeast Asia.
The story was corrected to show that Israel-U.S. attacks on Iran started Feb. 28, not March 1.