Oil surges above $100 as Middle East conflict escalates

Global oil prices surged in early Asian trading on Monday, climbing above $100 per barrel for the first time in nearly four years as tensions in the Middle East intensified following renewed clashes involving Iran, the United States and Israel.

At the time of filing this report, West Texas Intermediate (WTI) crude was trading at $108.66 per barrel, up $17.76, or 19.5 per cent, while Brent crude rose to $108.69, gaining $16.00, or 17.3 per cent.

The rally followed a sharp escalation in the regional conflict over the weekend, including attacks on energy infrastructure and military targets that have heightened concerns about potential disruptions to oil flows from the Middle East.

Israeli strikes reportedly targeted major fuel storage facilities near Tehran, while Iran continued launching drone and missile attacks across the region.

A drone strike damaged a desalination plant in Bahrain, a missile barrage injured several people in central Israel, and a US service member was reportedly killed following an Iranian counterattack in Saudi Arabia.

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Adding to the geopolitical uncertainty, Iran’s Assembly of Experts named Mojtaba Khamenei, the son of Ali Khamenei, as the country’s new supreme leader.

Analysts said the appointment signals continuity in Tehran’s hardline leadership at a time of rising regional tensions.

Financial markets reacted sharply to the developments. Futures linked to the S&P 500 and Nasdaq-100 both fell by about 1.6 per cent as investors priced in heightened geopolitical risk and surging energy costs.

Energy traders are particularly focused on whether the conflict could disrupt production or exports from major Gulf producers.

Any significant interference with shipping through the Strait of Hormuz — a route that carries roughly one-fifth of global seaborne oil — could remove millions of barrels per day from the market.

The spike in crude prices has also strengthened the US dollar and raised concerns about a renewed wave of energy-driven inflation, especially for major oil-importing economies already grappling with high fuel costs.