Oil prices spike as US and Iran trade strikes and Israel expands into Lebanon
Global oil prices surged sharply on Monday as markets reacted to the exchange of military strikes between the United States and Iran, compounded by fresh Israeli military advances further into Lebanon. The dual escalation raised immediate fears about disruptions to crude oil supply routes through the Persian Gulf and the Strait of Hormuz, two of the world's most critical energy chokepoints.
Brent crude and West Texas Intermediate both recorded significant intraday gains, with traders pricing in a risk premium for potential supply disruption as the situation in the Middle East deteriorated rapidly. Iran is a member of OPEC and produces several million barrels of oil per day; any direct impact on its production or export infrastructure would have outsized global supply implications.
The price spike is being felt across global markets, with energy-importing nations including Pakistan, Bangladesh, and several South and Southeast Asian economies facing an immediate worsening of their import bills. Higher oil prices also translate directly into inflationary pressure on food, transportation, and manufacturing costs worldwide.
Major oil companies and shipping operators were reported to be assessing their exposure to Middle East routes, with some vessels already reportedly altering courses to avoid potential conflict zones near the Strait of Hormuz.
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