Oil prices surge as Iran war widens across Middle East

Global oil prices spiked sharply Sunday night after the United States and Israel launched military strikes against Iran, raising fears of supply disruptions in one of the world’s most critical energy corridors.

Brent crude, the global benchmark, jumped more than 7% in early Asian trading to $78.26 per barrel as of 8:10 p.m. Eastern Time, after briefly opening above $81. Over-the-counter trades showed prices surging as much as 10% to around $80 a barrel, traders said.

The rally marks the strongest price level in over a year and signals immediate market anxiety over the widening Middle East conflict.

Strait of Hormuz in Focus

Analysts say the key risk is the Strait of Hormuz, the narrow waterway bordering Iran through which more than 20% of global oil supply passes.

Most tanker owners, oil majors and trading houses have reportedly suspended crude oil, fuel and liquefied natural gas shipments through the strait after Tehran warned vessels against moving through the area. Insurance premiums for tankers have also surged, while some ships are actively avoiding the corridor.

“While the military attacks are themselves supportive for oil prices, the key factor here is the closing of the Strait of Hormuz,” Ajay Parmar, director of energy and refining at ICIS, told Reuters.

Energy economist Jorge Leon of Rystad told the news agency that a full closure could remove between 8 million and 10 million barrels per day of crude from the market, even after partial rerouting through Saudi Arabia’s East-West pipeline and Abu Dhabi’s alternative routes.

Rystad expects prices to rise by about $20 when markets fully reopen, potentially pushing Brent to around $92 per barrel.

Other analysts were more blunt.

“We expect prices to open much closer to $100 a barrel and perhaps exceed that level if we see a prolonged outage of the Strait,” Parmar said.

Duration Will Determine Impact

Oil analyst Ellen Wald told Axios that the impact will depend heavily on how long military operations last.

“If we’re looking at this kind of level of military activity in the Gulf for four weeks, I think we will probably have some serious problems, particularly in Asia, for availability of crude oil and oil products,” she said. That could mean “serious price hikes and potentially even shortages in Asian countries.”

Even countries like the United States, which produce significant volumes of oil, would not be insulated. “In a global market, even though the U.S. has plenty of oil, it will affect gasoline prices,” Wald noted.

President Donald Trump suggested on Sunday that the conflict could potentially last up to four weeks.

So far, there have been no confirmed reports that U.S. or Israeli forces have directly targeted Iran’s oil production or export infrastructure. Likewise, Iran’s retaliatory strikes have not yet been reported to hit oil facilities in Gulf states.

But analysts warn that could change.

“The longer this thing goes on, the more likely it is that either or both sides in this conflict… will play their energy leverage cards in order to try to get an advantage,” Clayton Seigle of the Center for Strategic & International Studies told Axios.

Limited Cushion from OPEC+

In a separate development, OPEC+ agreed Sunday to increase output by 206,000 barrels per day starting in April — a modest boost equal to less than 0.2% of global demand.

Analysts say that increase is too small to offset a major disruption in the Strait of Hormuz.

Meanwhile, Asian governments and refiners are reviewing emergency stockpiles and alternative supply routes as uncertainty deepens.

For now, the early price surge reflects anxiety — but not yet panic. Traders appear to be pricing in disruption risk, while stopping short of assuming a full-scale shutdown of regional oil exports.

If the strait remains open, prices could stabilize. If it closes — even temporarily — oil markets may be heading toward triple-digit territory.