Oil Prices Surge Over 3% on Strait of Hormuz Escalation

Global oil benchmarks jumped more than 3% in early Monday trading following a weekend of escalated military actions between the U.S. and Iran centered on the Strait of Hormuz, according to live price data and reports from OilPrice.com. The surge renews supply disruption fears critical to the global market.

West Texas Intermediate (WTI) crude traded at $73.80 per barrel, a gain of $2.39 or 3.35%. The international benchmark, Brent crude, rose to $78.52, up $2.51 or 3.3%, according to live data. The Bakken oil price differential to WTI was $-3.42 per barrel.

The price spike follows intense U.S. strikes on Iran and Iranian retaliatory missile attacks on five U.S. allies in the region, including Bahrain, Kuwait, Qatar, Jordan, and Oman, OilPrice.com reported. Iran claimed the Strait of Hormuz is closed, though the U.S. disputes that assertion. Maritime traffic through the critical oil chokepoint has slowed to a trickle.

“Clearly, the risk is that this escalates to levels seen early in the war, where neighbouring countries and their energy infrastructure are also targeted,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note cited by OilPrice.com. Analysts at ANZ noted that hopes for a quick resolution may be in doubt after the intensified tensions.

The disruption extended to liquefied natural gas (LNG) markets. Qatar’s Transport Ministry issued an urgent advisory for all maritime vessels to temporarily cease sailing, according to maritime intelligence firm Windward. This blanket suspension directly impacts LNG export flows from Ras Laffan, tightening global gas supply as Europe seeks to refill storage, OilPrice.com reported. Europe's benchmark TTF gas futures jumped 3.35%.

For Bakken operators, the sudden return of a geopolitical risk premium provides a stronger price floor for local crude. The maintained differential near $-3.42 suggests Bakken barrels are moving to market without significant new logistical constraints, allowing producers to capture the majority of the global price increase. However, the volatility underscores the sector's exposure to distant geopolitical events that can rapidly alter crude economics.

The escalation marks a sharp reversal from the relative calm following a mid-June memorandum of understanding between the U.S. and Iran, which had allowed a recovery in Middle East shipments. The renewed hostilities have abruptly ended that recovery, refocusing market attention on supply security.