Source Mint
Oil prices rallied sharply on Sunday after renewed military action in the Middle East involving the United States, Israel, and Iran, sparking fresh fears of supply disruptions that could reverberate through global markets. The benchmark Brent crude jumped roughly 10 percent to around $80 a barrel in over-the-counter trading, marking one of the most significant one-day gains in recent months.
Market watchers said the surge was driven by fears that the conflict could disrupt flows through the Strait of Hormuz, a narrow and strategically vital waterway through which about 20 percent of the world’s oil supply passes. Tehran’s warnings to shipping companies and the suspension of tanker operations in the region have intensified concerns about bottlenecks in crude exports.
“While the military attacks are themselves supportive for oil prices, the key factor here is the closing of the Strait of Hormuz,” said Ajay Parmar, director of energy and refining at ICIS, underscoring the potential scale of disruptions.
Many analysts now believe that prices could climb much higher if tensions persist. Some forecasts suggest Brent crude could approach or even exceed $100 a barrel if the strait remains closed or if broader regional instability limits supply flows. RBC and Barclays analysts both cited the risk of further escalation pushing prices toward the triple-digit mark.
In response to the market stress, the OPEC+ group of producers agreed to a modest output increase of 206,000 barrels per day from April — a move intended to help offset potential supply shortfalls, though experts say it may only partially calm markets given the scale of the disruption.
Governments and refiners in Asia and elsewhere are reportedly assessing strategic stockpiles and alternative supply routes to mitigate the impact of potential bottlenecks, while traders continue to watch developments in the Gulf closely.
