Oil prices surged in early Monday trading as the military conflict between the United States, Israel, and Iran moved into a high-intensity phase, threatening the stability of the world's most critical energy transit routes.
U.S. benchmark West Texas Intermediate (WTI) jumped as much as 8% to trade near $72.41 per barrel, while international benchmark Brent crude soared over 8% to reach $79.05.
The price action reflects a direct threat to the Strait of Hormuz, the narrow waterway through which roughly one-fifth of global oil and liquefied natural gas (LNG) flows.
Following the death of Iran’s Supreme Leader, reports emerged of attacks on at least two vessels in the strait, leading several major shipping and insurance firms—including Gard and NorthStandard—to suspend war risk coverage for the region.
"This is not an obscure canal. It is the aorta of the global energy system," said Stephen Innes, managing partner at SPI Asset Management. Analysts at RaboResearch echoed the sentiment, noting that energy is a primary input for all global production, meaning a prolonged interruption could trigger a "cascading effect" of rising costs across every major economy.
The market remains particularly focused on the 1.6 million barrels of oil Iran exports daily, the majority of which is destined for China.