Tehran: Global oil prices have surged past the $100-per-barrel mark amid escalating tensions in the Middle East following the ongoing war between the United States, Israel, and Iran. The sharp rise in crude prices has sparked concerns over global energy supplies, inflation, and economic growth, while financial markets across the world have reacted with steep declines.
Brent crude, the international oil benchmark, jumped more than 30 percent on Sunday, briefly crossing $119 per barrel before settling near $110. The surge marks the first time oil prices have crossed the $100 threshold since Russia’s invasion of Ukraine in 2022. Analysts attribute the spike to fears of prolonged supply disruptions triggered by the conflict and retaliatory measures taken by Iran.
The crisis intensified after the United States and Israel launched joint strikes against Iran on February 28, targeting facilities linked to Tehran’s nuclear and military infrastructure. In response, Iran effectively halted shipping through the Strait of Hormuz, one of the world’s most critical maritime oil routes. Nearly one-fifth of the global oil supply passes through this narrow waterway, making any disruption there a major concern for global energy markets.
The shutdown has created a significant backlog of oil shipments. Several major producers in the Organization of the Petroleum Exporting Countries (OPEC), including Iraq, the United Arab Emirates, and Kuwait, have already reduced production as tankers struggle to move through the region.
Further aggravating the situation are attacks on energy facilities across the Gulf. Iran has been blamed for strikes on oil and gas infrastructure in countries such as Qatar, Saudi Arabia, and Kuwait. Meanwhile, Israel carried out air raids on Iranian oil infrastructure over the weekend for the first time since the conflict began. According to Iranian state media, the attacks struck four oil storage facilities and an oil products transfer centre in Tehran and the nearby province of Alborz. A fire reportedly broke out at the Shahran oil depot following the strikes.
Iran’s Islamic Revolutionary Guard Corps (IRGC) has issued strong warnings in response, threatening to target energy infrastructure across the region if the attacks continue. Officials warned that oil prices could surge as high as $200 per barrel if the conflict escalates further.
Despite the dramatic rise in oil prices, US President Donald Trump downplayed the economic impact, describing the increase as temporary. In a post on his social media platform Truth Social, Trump argued that the surge in oil prices was a “small price to pay” for eliminating what he called the Iranian nuclear threat. US Secretary of Energy Chris Wright also attempted to reassure consumers, stating in a television interview that any increase in fuel prices at the pump would likely be short-lived.
Financial markets, however, have reacted nervously to the developments. Stock markets across Asia suffered steep losses on Monday as investors braced for economic fallout from rising energy costs. Japan’s Nikkei 225 index closed more than five percent lower after dropping as much as seven percent earlier in the day. South Korea’s KOSPI fell six percent, while Hong Kong’s Hang Seng Index slipped by more than one percent.
European markets also opened sharply lower, with London’s FTSE 100 falling around two percent and Germany’s DAX declining nearly three percent. Meanwhile, US stock futures pointed toward potential losses on Wall Street, with S&P 500 futures dropping 1.7 percent and Nasdaq futures falling 1.9 percent.
Economists warn that sustained high oil prices could have serious consequences for the global economy. According to estimates by the International Monetary Fund (IMF), every sustained 10 percent increase in oil prices can push global inflation up by approximately 0.4 percent while reducing economic growth by about 0.15 percent.
Market analysts have cautioned that the economic impact will depend largely on how long the conflict continues. If the disruption proves temporary, global markets may recover quickly. However, prolonged instability in the Middle East could intensify inflationary pressures and slow global growth.
Adding to the concerns, Qatar’s Energy Minister Saad al-Kaabi warned that energy producers across the Gulf may soon be forced to halt production altogether if the situation deteriorates further. He indicated that many exporters could invoke “force majeure,” a legal declaration that allows companies to suspend contractual obligations due to extraordinary circumstances.
