Mar 2, 1:19 PM
Oil Surges as Iran Conflict Fuels Fears Over Global Energy Supplies
Crude jumps nearly 8% in early trade while investors watch Strait of Hormuz and regional escalation
Oil prices spiked on Monday as markets reacted to escalating hostilities between Iran, Israel and the United States, with traders bracing for potential disruptions to energy flows from the Middle East.
In early trading, US benchmark crude surged by about 8% before easing slightly to trade 5.9% higher at $71.00 per barrel. Brent crude, the international benchmark, rose 6.2% to $77.38 per barrel.
The gains reflect mounting concerns that the conflict could disrupt oil exports from Iran and neighboring producers. Tehran has retaliated against recent US and Israeli strikes, targeting assets across the region. Reports of attacks involving vessels in the Strait of Hormuz — a critical maritime chokepoint at the entrance to the Persian Gulf — have heightened fears of supply constraints.
Roughly one-fifth of global oil and liquefied natural gas shipments pass through the narrow waterway, making it one of the most strategically significant routes in the global energy system. Any prolonged disruption could send shockwaves through fuel markets and raise production costs worldwide.
Iran currently exports about 1.6 million barrels of oil per day, with China accounting for the majority of purchases. If Iranian exports are curtailed, Beijing may need to seek alternative suppliers, potentially tightening global supply further. Analysts note that China holds substantial oil reserves — estimated at up to 1.5 billion barrels — and could also increase imports from Russia to offset shortfalls.
Market participants had partly anticipated an escalation, given the recent buildup of US forces in the region. As a result, some risk had already been priced in before the latest developments.
Beyond oil, investors moved toward traditional safe-haven assets. Gold climbed 2.4% in early trading to around $5,371 per ounce, reflecting broader uncertainty in financial markets.
Equity futures pointed lower. Contracts tied to the S&P 500 and the Dow Jones Industrial Average were down roughly 0.8% by mid-morning in Bangkok.
Asian markets also opened under pressure. Japan’s Nikkei 225 fell more than 2% at the start of trading. Hong Kong’s Hang Seng Index dropped 1.6% to 26,215.91, while the Shanghai Composite was little changed at 4,163.01.
Elsewhere in the region, Taiwan’s benchmark index declined 0.6%, Singapore’s slipped 1.9%, and Thailand’s SET index lost 2.1%. Australia’s S&P/ASX 200 fell 0.3% to 9,173.50.
Energy analysts caution that the trajectory of oil prices will depend heavily on how long tensions persist and whether shipping routes remain accessible. For now, the Strait of Hormuz — a narrow stretch of water with outsized global influence — remains at the center of market anxiety.
