Global oil markets are experiencing sharp volatility as crude oil prices surged to nearly $119.50 per barrel, driven by escalating tensions in the Iran–Israel conflict and disruptions to critical energy transport routes across the Middle East.

The surge represents one of the largest price spikes in recent years, reflecting growing fears that the ongoing war could severely disrupt global oil supply chains.

The conflict has now entered its second week, with attacks targeting infrastructure vital to the production, storage and transportation of oil and natural gas.

Brent and WTI Prices Surge

The Brent crude benchmark, widely used as the global reference price for oil, briefly touched $119.50 per barrel, marking its highest level since the surge that followed Russia’s invasion of Ukraine in 2022.

Similarly, West Texas Intermediate (WTI), the benchmark for U.S. crude oil, also climbed sharply and reached around $119.48 per barrel at one point.

Although prices later slipped below the $100 per barrel mark, they remain significantly higher than the approximately $70 per barrel levels recorded before the war began on February 28.

The sudden rise reflects the market’s concern about supply disruptions in one of the world’s most critical energy-producing regions.

Strait of Hormuz Shipping Disruptions

One of the biggest concerns for global oil markets is the disruption of tanker traffic through the Strait of Hormuz.

This narrow waterway, located near Iran’s coastline, is one of the most strategically important oil transit routes in the world.

According to energy research firm Rystad Energy, about 15 million barrels of crude oil — roughly 20% of the world’s daily oil supply — typically pass through the strait each day.

However, due to the risk of missile and drone attacks, tanker traffic through the Strait of Hormuz has almost completely stopped.

Oil shipments from several major producers are now severely affected, including:

• Saudi Arabia

• Kuwait

• Iraq

• Qatar

• Bahrain

• United Arab Emirates

• Iran

The disruption of such a crucial shipping route has significantly increased fears of global energy shortages.

Oil Production Cuts Across the Gulf

In addition to transportation disruptions, several oil-producing countries in the Gulf region have also reduced production levels.

Countries including Iraq, Kuwait and the United Arab Emirates have reportedly cut output due to export constraints.

With tanker shipments halted, many producers are facing limited storage capacity, forcing them to temporarily reduce production.

The situation has intensified the supply crunch in global oil markets.

Energy experts warn that restarting production and restoring export operations could take weeks or even longer, depending on how the conflict evolves.

Attacks on Energy Infrastructure

The war has also directly affected energy infrastructure across the region.

Over the weekend, oil depots in Tehran were reportedly damaged following Israeli strikes, with fires continuing to burn at several facilities.

Elsewhere in the Gulf, Bahrain accused Iran of attacking a desalination plant, which is critical for drinking water supplies.

Bahrain’s national oil company also declared force majeure after its refinery complex was set ablaze during an Iranian strike.

A force majeure declaration allows companies to temporarily suspend contractual obligations due to extraordinary circumstances such as war or natural disasters.

These incidents have further heightened concerns about the security of energy infrastructure in the region.

One of the Biggest Oil Supply Shocks

Some analysts believe the crisis could represent one of the largest oil supply shocks in modern history.

Nicholas Mulder, an economic historian at Cornell University, described the situation as unprecedented in scale.

He noted that the current disruption may involve three to four times more oil supply losses than the 1973 and 1979 oil crises.

Those earlier crises triggered major global economic consequences, including energy shortages, inflation spikes and economic slowdowns.

If the current conflict continues to escalate, analysts warn that the impact on global markets could be similarly severe.

Global Economic Implications

Rising oil prices have significant implications for the global economy.

Higher energy costs can affect:

• Transportation expenses

• Manufacturing costs

• Electricity prices

• Inflation levels worldwide

Countries that depend heavily on imported oil could face higher fuel prices and increased economic pressure.

Energy-intensive industries may also experience rising production costs, which could eventually be passed on to consumers.

Challenges in Restoring Oil Supply

According to Jim Burkhard, vice president and global head of crude oil research at S&P Global Energy, the crisis has moved beyond a simple transportation disruption.

He explained that the problem now involves both shipping restrictions and reduced production capacity.

Restarting oil production and restoring export infrastructure may require complex technical work and coordinated international efforts.

Experts warn that the process could take weeks or longer, especially if the conflict continues to threaten infrastructure.

Growing Uncertainty in Global Energy Markets

The escalation of the Iran–Israel war has introduced significant uncertainty into global energy markets.

Oil traders and energy companies are closely monitoring developments in the region.

The situation is particularly sensitive because the Middle East accounts for a large share of the world’s oil production and exports.

Any prolonged disruption could lead to continued volatility in oil prices and broader economic effects worldwide.

Conclusion

The surge in crude oil prices to around $119.50 per barrel highlights the serious impact of the escalating Iran–Israel conflict on global energy markets.

With tanker traffic through the Strait of Hormuz nearly halted and production cuts spreading across Gulf countries, the world could be facing one of the largest oil supply shocks in decades.

As the war continues with no clear end in sight, global markets remain on edge, watching closely for developments that could further influence oil prices, energy supply and economic stability worldwide.

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