Global oil prices moved higher at the start of the week as investors renewed their attention on risks to energy infrastructure in West Asia, even as the United States called for international cooperation to protect shipping routes through the Strait of Hormuz.
Brent crude futures climbed to $104.41 a barrel in early Monday trading, rising $1.27 or about 1.2 per cent, while US West Texas Intermediate (WTI) crude gained 54 cents to reach $99.25 per barrel, according to market data reported by Reuters. The gains followed strong increases in the previous trading session, when both benchmarks rose sharply amid continuing geopolitical tensions.
The rally in oil prices reflects growing concern in global energy markets as the conflict involving the United States, Israel and Iran continues to disrupt oil supply routes and threaten key export facilities across the region.
Oil Markets React To Escalating Supply Risks
Oil prices have surged significantly since the beginning of the crisis. Both Brent and WTI crude contracts have climbed more than 40 per cent this month, reaching their highest levels since 2022.
The spike followed military strikes by the United States and Israel on Iran, after which Tehran halted shipping through the Strait of Hormuz. The narrow maritime corridor is one of the most important energy transit routes in the world, handling roughly a fifth of global oil supply.
Any disruption in the strait can therefore have immediate consequences for global energy markets, pushing prices higher as traders anticipate potential shortages.
Commodity analysts say the latest developments have renewed worries about the security of West Asian oil infrastructure.
“US strikes over the weekend on Kharg Island raised supply concerns, as most of Iran’s oil exports pass through it,” commodity strategists at ING said in a note cited by the media agency.
Although the strikes appeared to focus on military targets rather than directly hitting energy facilities, analysts said the situation still presents supply risks because Iranian oil remains among the few shipments currently moving through the Strait of Hormuz.
Strategic Energy Infrastructure Under Pressure
Kharg Island plays a critical role in Iran’s oil exports. The terminal is estimated to handle around 90 per cent of the country’s crude shipments.
Over the weekend, US President Donald Trump warned of the possibility of further strikes targeting the island after earlier military operations in the area.
Iran responded with retaliatory actions, including drone attacks on energy infrastructure elsewhere in the region. According to Reuters, Iranian drones struck a major oil terminal in Fujairah in the United Arab Emirates shortly after the Kharg Island attacks.
Although oil loading operations at the Fujairah facility have since resumed, sources cited by the organisation said it remains unclear whether activity has returned fully to normal levels.
Fujairah is an important export hub located outside the Strait of Hormuz and handles approximately one million barrels per day of the United Arab Emirates’ Murban crude, representing roughly 1 per cent of global oil demand.
The vulnerability of such facilities has heightened fears that the conflict could begin to affect a wider portion of the global oil supply chain.
Escalation Concerns Continue To Shape Markets
Analysts say the ongoing conflict presents several potential scenarios that could further escalate risks in the region.
Erik Meyersson, an analyst at SEB, noted in a research note that the United States is reportedly considering a range of options that could further intensify the confrontation.
“The US is weighing high-risk ground options, including raiding nuclear sites for Iran’s enriched uranium, seizing the Kharg Island oil hub, and occupying southern Iran to protect the Strait of Hormuz,” Meyersson said.
He added that such measures would imply a “significant escalation” and could introduce much higher levels of geopolitical risk into global energy markets.
Despite the tensions, Washington has also been urging international cooperation to safeguard the Strait of Hormuz.
On Sunday, President Trump called on other countries to assist in protecting the key energy route, saying the United States was in discussions with several nations about joint efforts to police the corridor.
The US administration is also maintaining communication channels with Iran, although Trump expressed doubts about Tehran’s willingness to engage in meaningful negotiations to end the conflict.
Emergency Oil Reserves May Help Stabilise Markets
As oil prices continue to climb, international agencies are exploring measures aimed at stabilising supply.
The International Energy Agency (IEA) said on Sunday that more than 400 million barrels of oil from strategic reserves will begin entering the market in an attempt to counter price spikes caused by the conflict.
According to the IEA, oil from reserves held by countries in Asia and Oceania will be released immediately, while stockpiles from Europe and the Americas are expected to become available toward the end of March.
The coordinated release is expected to be one of the largest emergency draws from global oil reserves.
Until greater clarity emerges, oil markets are likely to remain volatile as investors weigh geopolitical developments against efforts by governments and international agencies to maintain global energy supply.
