Oil Prices Surge Past $115 Per Barrel as Iran War Disrupts Global Supply

Global oil prices have climbed above $115 per barrel for the first time in more than three and a half years as the ongoing conflict involving Iran, Israel and the United States continues to disrupt energy production and shipping across the Middle East.

Data from the Chicago Mercantile Exchange showed that the price of Brent crude, the international benchmark for oil, rose to $107.97 per barrel, marking a 16.5 percent increase from Friday’s closing price of $92.69.

Similarly, West Texas Intermediate (WTI), the main benchmark for U.S. crude oil, climbed to about $106.22 per barrel, representing a 16.9 percent rise from its previous close of $90.90.

The surge follows a sharp increase last week, when U.S. crude prices jumped 36 percent while Brent crude gained 28 percent, driven largely by fears of supply disruptions as the conflict entered its second week.

Strait of Hormuz Disruptions

A key factor in the price spike is the disruption of shipping through the strategically important Strait of Hormuz. According to energy research firm Rystad Energy, about 15 million barrels of crude oil  roughly 20 percent of global supply  normally pass through the strait daily.

However, threats of missile and drone attacks linked to the conflict have significantly reduced tanker movement through the waterway. The strait serves as a major export route for oil and gas from countries including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain and the United Arab Emirates.

Meanwhile, Iraq, Kuwait and the UAE have reportedly reduced oil production as storage facilities become filled due to limited export capacity.

Attacks on Energy Facilities

Since the conflict began on March 1, strikes targeting oil and gas infrastructure have intensified concerns about global supply shortages. Authorities in Iran reported that Israeli strikes on oil depots in Tehran and a petroleum transfer terminal killed four people.

Israeli officials claimed the facilities were being used by Iran’s military to supply fuel for missile launches.

Iran currently exports about 1.6 million barrels of oil per day, with most shipments going to China. Any disruption to these exports could further tighten global supply and drive prices higher.

Impact on Consumers and Markets

Rising oil prices have already begun affecting consumers and financial markets.

According to the AAA (American Automobile Association), the average price of regular gasoline in the United States climbed to $3.45 per gallon, about 47 cents higher than a week ago. Diesel prices rose to around $4.60 per gallon, an increase of about 83 cents within the same period.

Speaking on State of the Union (CNN program), U.S. Energy Secretary Chris Wright said gasoline prices could fall below $3 per gallon again in the near future.

“Even in the worst case, this situation is likely to last weeks rather than months,” he said.

Financial Market Reactions

The spike in energy prices has unsettled global financial markets, raising fears that higher fuel costs could trigger inflation and slow consumer spending.

Futures tied to the S&P 500 dropped 1.6 percent, while the Dow Jones Industrial Average futures fell 1.8 percent. Futures linked to the Nasdaq Composite declined 1.5 percent, signaling potential losses when markets reopen.

Analysts warn that if oil prices remain above $100 per barrel for a prolonged period, the strain on the global economy could intensify.

Natural gas prices have also risen during the conflict, though at a slower pace, reaching $3.33 per 1,000 cubic feet, about 4.6 percent higher than the previous closing price.