Global oil prices surged on Monday following coordinated US and Israeli strikes on Iran and retaliatory attacks targeting Israel and American military installations across the Gulf region.
The escalation has triggered fresh concerns over possible disruptions to crude supply from the Middle East, sending shockwaves through the global energy market.
Traders are betting that oil exports from Iran and other Gulf producers could slow significantly or halt entirely. Attacks across the region, including on two vessels navigating the Strait of Hormuz, have restricted export routes and heightened fears of prolonged supply shortages.
West Texas Intermediate (WTI), the US benchmark crude, climbed to about $72 per barrel early Monday, representing a 7.3 percent increase from Friday’s $67 closing price, according to data from CME Group.
Brent crude, the international benchmark, rose to $78.55 per barrel, up 7.8 percent from Friday’s $72.87, which had marked a seven-month high.
Energy experts warn that sustained attacks could further drive up crude and gasoline prices globally, worsening inflationary pressures on consumers already grappling with high living costs.
Approximately 15 million barrels of crude oil per day — nearly 20 percent of global supply — pass through the Strait of Hormuz, widely regarded as the world’s most critical oil chokepoint. The narrow waterway facilitates exports from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
Iran had temporarily shut parts of the strait in mid-February for what it described as a military drill, a move that pushed oil prices up by about six percent in subsequent days.
Amid the tension, eight members of the OPEC+ alliance announced plans to increase crude production. The Organization of the Petroleum Exporting Countries disclosed that output would rise by 206,000 barrels per day in April — above analysts’ expectations.
The countries set to boost production include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
Jorge León, Senior Vice President and Head of Geopolitical Analysis at Rystad Energy, said market concerns were focused more on logistics than production figures.
“Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” León said in an email.
“If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets,” he added.
Iran currently exports about 1.6 million barrels of oil daily, mostly to China. Analysts say any disruption to these exports could force Beijing to seek alternative supplies, further tightening the global market.
Meanwhile, the conflict has severely disrupted air travel across the Middle East, with thousands of flights cancelled or rerouted following widespread airspace closures.
Airlines cited safety concerns as several countries shut their skies after the strikes.
Emirates Airlines said: “Due to multiple regional airspace closures, Emirates has temporarily suspended all operations to and from Dubai, up until 1500 hrs UAE time on Monday, 2 March.”
A flydubai spokesperson stated: “Our teams are working diligently to implement comprehensive welfare for all affected customers. The safety of our passengers and crew remains our highest priority.”
He added: “We are currently experiencing a high volume of calls and appreciate our customers’ patience while our teams work to assist everyone as quickly as possible.”
Qatar Airways also confirmed disruptions.
“Qatar Airways flights to, and from, Doha have been temporarily suspended due to the closure of Qatari airspace,” the airline said.
It added: “Qatar Airways will resume operations once the Qatar Civil Aviation Authority announces the safe reopening of Qatari airspace.”
Saudi Arabia’s national carrier, Saudia, announced it had cancelled a number of flights in line with safety and security standards, urging passengers to verify flight status before proceeding to airports.
Industry experts warn that flight delays and cancellations may persist for days as tensions evolve.
“For travelers, there’s no way to sugarcoat this,” said Henry Harteveldt, President of Atmosphere Research Group.
“You should prepare for delays or cancellations for the next few days as these attacks evolve and hopefully end,” he added.
Mike McCormick, former head of air traffic control at the US Federal Aviation Administration and now a professor at Embry-Riddle Aeronautical University, said partial reopening of airspace could occur soon.
“Those countries then will be able to go through and say, ok, we can reopen this portion of our space but we’ll keep this portion of our airspace closed,” McCormick said.
“So, I think what we’ll see in the next 24 to 36 hours is how the use of airspace evolves as the kinetic activity gets more well-defined and as the capability of Iran to actually shoot missiles and create additional risk is diminished due to the attacks,” he added.
