Oil prices jumped sharply Monday after Iranian retaliatory attacks disrupted shipping in the Strait of Hormuz, one of the world’s most important energy corridors.
The surge came after U.S. and Israeli strikes targeted Iran over the weekend. In response, Iran launched attacks that damaged tankers and disrupted traffic through the narrow waterway linking the Persian Gulf to global markets.
Brent crude rose as much as 13% overnight to $82.37 a barrel, its highest level since January 2025. It later pulled back but was still trading up roughly 9.5% at $79.78.
West Texas Intermediate crude, the U.S. benchmark, climbed about 8%, rising from around $67 on Friday to about $72 a barrel.
Markets reacted quickly to signs that global supply could tighten.
About 15 million barrels of oil per day, roughly 20% of the world’s supply, pass through the Strait of Hormuz. The waterway sits between Iran and Oman and serves as the main export route for oil from Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, Qatar, and Iran.
More than 200 vessels, including oil and liquefied gas tankers, dropped anchor outside the strait after the attacks. Three tankers were damaged. One seafarer was killed.
Analysts warned that if shipments are restricted for an extended period, prices could rise further.
“It’s a really supply-and-demand, simple economics equation,” CBS News correspondent Kelly O’Grady said. “If you were to decrease the global supply by cutting off the Strait of Hormuz and preventing that oil that flows through, you would see prices spike.”
Iran exports about 1.6 million barrels of oil per day, most of it to China. A sustained disruption could force buyers to seek alternative suppliers, adding more pressure to global markets.
Shipping companies and insurers are also reacting. Higher insurance costs and security concerns could increase the cost of transporting oil, pushing prices higher at the pump.
U.S. gasoline futures jumped as much as 9.1% to $2.496 per gallon, the highest level since July 2024. They later settled at $2.408 per gallon, still up more than 5%.
Analysts say retail gasoline prices in the United States could rise above $3 per gallon if tensions continue.
Despite the spike, some experts say markets are not yet signaling a full-blown energy crisis.
“Markets are acknowledging the seriousness of the conflict, but are also signalling that, for now, this is a geopolitical shock, not a systemic crisis,” said Priyanka Sachdeva, senior analyst at Phillip Nova.
Oil producers are also stepping in. OPEC+ announced Sunday it would increase output by 206,000 barrels per day in April. The group includes Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
Still, analysts caution that higher output may not offset disruptions if shipments through the Strait remain constrained.
“Roughly one-fifth of global oil supply passes through the Strait of Hormuz,” said Jorge León of Rystad Energy. “If flows through the Gulf are constrained, additional production will provide limited immediate relief.”
The International Energy Agency said it is in contact with major producers and stands ready to coordinate strategic reserve releases if necessary.
For now, investors are watching the Strait of Hormuz closely. Any prolonged closure or escalation could send oil prices even higher and add new pressure on American consumers.