Oil prices jumped sharply in early Asian trading on Monday as mounting geopolitical tensions following U.S. airstrikes on Iranian nuclear sites sparked fears of supply disruptions in the Middle East. After an initial strong rally, crude prices eased somewhat from their session peaks.
By 00:05 GMT, August Brent crude futures rose 2.4% to $79.00 per barrel, while West Texas Intermediate (WTI) climbed 2.5% to $73.84 per barrel. Both benchmarks briefly surged nearly 4%, reaching their highest levels in four months, with Brent approaching $81 at the peak of the session.
The price swings came amid heightened market uncertainty triggered by U.S. strikes over the weekend targeting key Iranian nuclear facilities. Iran responded with threats of retaliation, escalating concerns over regional stability and potential impacts on energy exports.
State media reports out of Tehran suggested the possibility of blocking the Strait of Hormuz—a vital chokepoint through which a significant portion of global oil shipments transit. Such a move could severely disrupt energy flows worldwide and intensify volatility in oil markets.
The ongoing military confrontations between Iran and Israel, now entering their 11th day, have already injected considerable instability into the oil market. Rising tensions between Tehran and Washington also raise the prospect of fresh U.S. sanctions targeting Iranian oil, which could tighten supply chains affecting Asia and Europe.
Market participants are closely watching for Iran’s next moves, with unconfirmed reports hinting at potential attacks on U.S. military installations in the region. These risks have pushed the geopolitical premium on oil prices higher.
Analysts at ANZ characterized the U.S. airstrikes as a “significant escalation” and forecast that, if tensions worsen, oil prices could stabilize between $90 and $95 per barrel. They also warned of increased risks to supply routes through the Strait of Hormuz and expressed skepticism about the chances of renewed diplomatic negotiations over Iran’s nuclear program in the near future.