Global oil prices have climbed above $100 a barrel for the first time since 2022 as the ongoing conflict involving the United States and Israel against Iran continues to disrupt energy markets and threaten global supply routes.
The international benchmark Brent crude surged by more than 20% on Sunday, briefly rising above $114 a barrel before easing slightly to around $107.50 during early trading on Monday. The sharp increase marks the first time oil prices have crossed the $100 threshold since the market volatility triggered by the Russian invasion of Ukraine in 2022.
Energy markets have reacted strongly to concerns over supply disruptions following the conflict that began with joint US–Israeli strikes on Iran in late February. Oil prices have risen by roughly 50% since the start of the military operations.
A key factor behind the surge has been the disruption of shipping through the Strait of Hormuz, a critical maritime route through which nearly one-fifth of the world’s oil supply passes. Iranian actions in the waterway have effectively halted tanker traffic, creating a backlog of crude exports from major producers in the region.
Producers including Iraq, the United Arab Emirates and Kuwait have reportedly reduced production levels as storage capacity fills due to the slowdown in exports.
The conflict has also expanded to include strikes on energy infrastructure. Israeli air strikes on Saturday reportedly targeted several oil facilities in Tehran and the nearby province of Alborz, according to Iranian state media.
Iran’s Islamic Revolutionary Guard Corps warned that additional attacks on regional energy infrastructure could follow, suggesting that prolonged escalation could push global oil prices even higher.
Financial markets in Asia reacted sharply to the spike in energy prices and uncertainty over supply disruptions. Japan’s Nikkei 225 dropped more than 7% in early trading, while South Korea’s KOSPI fell over 8%. Hong Kong’s Hang Seng Index also declined by nearly 3%.
Economists warn that sustained high oil prices could have broader global consequences. According to estimates by the International Monetary Fund, a sustained 10% increase in oil prices can raise global inflation by around 0.4% and reduce economic growth by roughly 0.15%.
Energy analysts caution that while markets may stabilise if the disruption proves temporary, prolonged instability in the Gulf region could significantly affect global economic conditions and energy supply chains.