Global oil prices surged sharply on Monday as the intensifying war involving Iran threatened energy production and shipping routes in the Middle East, raising fears of major supply disruptions.
Brent crude, the global benchmark, spiked to nearly $119.50 per barrel in early trading before easing to just above $101, still around 9 per cent higher on the day. West Texas Intermediate (WTI) crude also climbed to $119.48 before settling near $100.
Since the conflict began following US-Israeli strikes on Iran on February 28, Brent prices have jumped from about $82 per barrel to nearly $119, an increase of roughly $37 amid growing market anxiety.
The surge comes as Iran’s Assembly of Experts appointed Mojtaba Khamenei, 56, as the country’s third supreme leader after the death of his father, Ayatollah Ali Khamenei, in the February 28 US-Israeli strikes. Considered a hardliner with strong ties to the Islamic Revolutionary Guard Corps (IRGC), he had long wielded influence behind the scenes. His elevation has drawn criticism abroad, with US President Donald Trump dismissing him as a “lightweight”.
Markets are particularly concerned about the Strait of Hormuz, through which about 15 million barrels of oil — nearly 20 per cent of global supply — pass daily, according to Rystad Energy. Missile and drone threats have sharply reduced tanker movements through the key shipping route.
The war has also hit energy infrastructure. Bahrain reported damage to a desalination plant while its national oil company declared force majeure after an Iranian strike set a refinery complex ablaze. With Middle Eastern exports under threat, rising fuel prices are pushing inflation higher worldwide and rattling global financial markets.
Desalination plants targeted
Attacks on desalination plants, a crucial source of drinking water in the Middle East, have raised alarm during the conflict. Iran accused the US of striking a facility on Qeshm Island supplying 30 villages, while Bahrain said an Iranian drone damaged a desalination plant. Experts warn such attacks could escalate the war significantly, as many Gulf nations rely heavily on desalinated water for daily survival.
Also read: Mojtaba Khamenei succeeds father as Iran’s Supreme Leader
G7 ready to support energy supply
Finance ministers from the Group of Seven (G7) countries said they are ready to take “necessary measures” to stabilise global energy markets amid the Middle East conflict. In a statement after a video meeting hosted by France, the ministers said the steps could include releasing strategic oil stockpiles if needed to ensure adequate supply and reduce volatility in global oil and gas prices.
China calls for immediate ceasefire
China has called for an urgent ceasefire in the Gulf as tensions escalate. Foreign Minister Wang Yi held separate talks with his counterparts in Bahrain and Kuwait, expressing deep concern over the rapidly worsening situation. Beijing said it is willing to play a constructive role in maintaining regional stability while stressing that the sovereignty and territorial integrity of Gulf nations must be respected.
WHO warns of health risks
The World Health Organization has warned that the expanding conflict could trigger serious public health risks across the region. Director-General Tedros Adhanom Ghebreyesus said damage to petroleum facilities in Iran could contaminate food, water and air, posing dangers particularly to children and vulnerable groups.
Video links US strike to Iran school blast
Video footage has emerged showing a US Tomahawk missile striking an Iranian naval base beside a primary school in Minab, where more than 168 people, mostly children, were killed during the opening strikes of the conflict on February 28. The footage, verified by investigators including Bellingcat, suggests the school was hit while the US targeted an adjacent IRGC compound, contradicting claims by US President Donald Trump that Iran was responsible for the attack.
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