U.S. War With Iran Sends Oil Above $100, Spurs Market Volatility

The U.S. war with Iran has sent oil prices soaring above $100 per barrel and triggered broad market volatility, as traders price in the risk of prolonged supply disruptions.

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CNBC

CNBC reports that how high oil and gas prices rise depends on whether the Iran war disrupts supplies for a prolonged period, and describes the situation as a "worst-case scenario" for the global oil market as the conflict engulfs the Middle East with no clear off-ramp.

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Crude oil prices "settled up more than 6% on Monday, after surging more than 12% earlier in the day," reflecting acute market reactions to the fighting.

A key driver of the price shock is the near-halt to tanker traffic through the Strait of Hormuz, a critical chokepoint for global seaborne oil exports, as ship owners take precautionary measures.

CNBC notes that tanker traffic through the Strait "has come to a standstill" amid the conflict, and that "about a third of the world's total seaborne oil exports passed through the Strait in 2025," according to energy consulting firm Kpler.

CNBC

Analysts including JPMorgan's Natasha Kaneva say the war has already produced the "first near total halt to shipping through the Strait in modern history," underscoring the scale of the disruption.

The conflict has expanded to attacks on regional energy infrastructure, increasing the risk of sustained supply losses for both oil and liquefied natural gas (LNG).

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CNBC

CNBC reports that "the Islamic Republic has expanded its retaliatory strikes to include regional energy facilities," and that "Qatar on Monday shut down liquefied natural gas production after two drones hit key facilities."

The article also highlights that "about 20% of global LNG exports come from the Gulf, primarily Qatar, passing through the Strait," a concentration that raises global vulnerability.

Market strategists and banks have sketched out steep price scenarios if the conflict persists, warning that storage limits and production shutdowns could force dramatic price spikes.

Bank of America's Francisco Blanch told CNBC that "Brent prices could surge above $100 per barrel...if the regime in Tehran takes a hard line and attacks neighboring energy facilities," and warned a prolonged disruption "could spike Brent prices by $40 to $80 per barrel."

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JPMorgan's Kaneva added that a war lasting more than three weeks "would exhaust the Gulf countries' storage capacity...forcing them to shut down production," with Brent potentially hitting $120 per barrel under that scenario.

The immediate economic impact will be felt at the pump and in European gas markets, with forecasters expecting rapid price transmission to consumers and energy users.

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CNBC

CNBC cites GasBuddy's Patrick De Haan saying "Drivers in the U.S. will likely see gasoline prices start to rise today or tomorrow," and that motorists "should expect an average 10- to 30-cent-per-gallon increase at the pump over the next week."

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Meanwhile, "European natural gas futures soared more than 40%," showing sharp contagion across fuels and regions.