Oil prices surged sharply on Monday, with Brent crude crossing the $110 mark and West Texas Intermediate (WTI) climbing past $100 a barrel, as the Middle East conflict completed its one month. Markets remained on edge as Houthis enter the Iran war and US plans to extend onground presence in the region, further fueling uncertainty over the trajectory of the war.
Around 7 am IST, Brent Crude stood at $116.4 per barrel, up 3.84 or 3.41%, after gaining over 4% in its previous session on Friday. WTI Crude followed the rally, jumping to $103.1, up 3.44 or 3.45%, after recording a gain of 5.5% last week.
So far this month, Brent has climbed 59%, marking its steepest monthly rise and exceeding gains seen during the 1990 Gulf War.
The surge comes after Iran tightened its noose on the Strait of Hormuz effectively disrupting the strategically crucial route that sees around one-fifth of global oil and gas supplies pass.
The conflict, which began on February 28 with US and Israeli strikes on Iran, has expanded across the Middle East. Over the weekend, Yemen’s Iran-aligned Houthis carried out their first attacks on Israel since the start of the war, raising further concern over key shipping lanes in the Arabian Peninsula and the Red Sea.
The US also stepped up its military footprint in the Middle East, with around 3,500 Marines and sailors aboard the USS Tripoli deployed to the region. The move, described as potentially the largest US buildup there in nearly two decades, was confirmed by US Central Command. It comes after almost a month of conflict involving Iran and is being viewed as part of Washington’s effort to expand its operational options in the region.
Meanwhile, according to data from Kpler, cited by Reuters, Saudi crude exports redirected from the Strait of Hormuz to the Yanbu port in the Red Sea reached 4.658 million barrels per day last week.
JP Morgan analysts said that if exports from Yanbu were disrupted, Saudi oil flows could be forced to shift towards Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean.
Tensions in the region intensified further over the weekend after attacks damaged Oman’s Salalah terminal, despite ongoing attempts to advance ceasefire discussions.
Iran has said it is prepared to respond to a US ground offensive, accusing Washington of planning a land attack while simultaneously pursuing negotiations.
Meanwhile, Pakistan’s foreign minister Ishaq Dar said that efforts had been discussed on possible ways to achieve an early and lasting end to the conflict, along with potential US-Iran talks in Islamabad.
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