Oil Prices Surge Past $115 a Barrel as Iran War Disrupts Production and Shipping

Chicago, Mar 9: Oil prices jumped sharply on Monday as the intensifying conflict involving Iran triggered concerns over disruptions to energy production and shipping routes in the Middle East, sending tremors through global financial markets.

Brent crude, the international benchmark, briefly climbed to $119.50 a barrel before easing to $112.98 in later trading. US benchmark West Texas Intermediate also surged to $119.48 per barrel before retreating to $110.17.

The surge follows the second week of hostilities in the region, with escalating attacks targeting critical infrastructure. Bahrain accused Iran of striking a desalination facility crucial for drinking water supplies, while Israeli strikes reportedly set oil depots in Tehran ablaze overnight.

Energy markets remain on edge as the conflict threatens the Strait of Hormuz, a strategic waterway through which around 15 million barrels of crude oil move daily — roughly one-fifth of global supply. Security threats, including missile and drone risks, have severely disrupted tanker traffic through the route.

Several Gulf producers, including Iraq, Kuwait and the United Arab Emirates, have reduced output as storage facilities fill due to restricted export capacity. Meanwhile, repeated strikes on energy facilities across the region have heightened fears of prolonged supply disruptions.

The rise in crude and natural gas prices is beginning to ripple across global economies. Higher fuel costs are pushing inflation upward and straining household budgets, particularly in Asia, which depends heavily on Middle Eastern energy imports.

Global markets reacted sharply to the volatility. Japan’s Nikkei 225 index dropped more than 7 per cent in early trading Monday, while US stock futures signalled potential losses for Wall Street after major indexes closed lower at the end of last week.

Fuel prices in the United States have also climbed rapidly. According to the AAA motor club, the average price of regular gasoline rose to $3.45 a gallon on Sunday, up about 47 cents from a week earlier, while diesel prices increased to around $4.60 a gallon.

Despite the spike, US Energy Secretary Chris Wright expressed confidence that fuel prices could ease soon, suggesting the market shock may be temporary.

Analysts warn that if crude prices remain above $100 per barrel for an extended period, the pressure could weigh heavily on global economic growth.

Meanwhile, Iranian officials said Israeli strikes on oil depots and a petroleum transfer terminal in Tehran killed four people. Israel claimed the facilities were being used by Iran’s military to supply fuel for missile operations.

Iran exports roughly 1.6 million barrels of oil per day, largely to China. Any disruption to those shipments could further tighten global supplies and sustain upward pressure on prices.

Natural gas markets have also seen modest gains during the conflict. Prices were trading around $3.33 per 1,000 cubic feet late Sunday, reflecting a steady rise after last week’s increases.

As tensions persist across the Middle East, energy markets remain highly sensitive to developments that could further disrupt supplies and intensify economic uncertainty worldwide.