Global oil prices are skyrocketing as the spiralling Israeli-US war on Iran plunges energy markets into turmoil, igniting fears of a devastating global supply shock that could send crude markets into chaos.
The international benchmark, Brent North Sea crude, rose by 5.1 percent to reach $92.23 per barrel during trading.
Meanwhile, the main US benchmark, West Texas Intermediate, recorded an even steeper increase. The contract gained 5.9 percent, pushing the price up to $88.38 per barrel.
Traders reacted to fears that the escalating conflict could disrupt exports from the region, which remains central to global oil production and shipping routes.
Gas prices across Europe and the UK have also risen sharply as fears grow that the war in the Middle East could disrupt energy supplies.
Markets reacted after unconfirmed reports that Iran had begun laying mines in the Strait of Hormuz, a key shipping route used to transport fuel around the world. Any disruption to traffic through the strait could affect deliveries of liquefied natural gas to Europe and Asia.
The benchmark European gas price increased by about 5.7 percent during morning trading, while the main British wholesale contract rose by roughly 6 percent.
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Tensions also escalated after the United States Central Command said US forces had “eliminated” 16 Iranian vessels it claimed were laying mines near the waterway.
Trump under pressure
US President Donald Trump is reportedly seeking an escape route from the conflict after failing to beat Iran into negotiating on US terms. With oil prices surging and the global markets unstable, a lengthy conflict will likely damage Trump’s already bruised reputation at home.
On Tuesday Trump threatened Iran with unprecedented military consequences if it had placed mines in the Strait of Hormuz and failed to remove them.
“If for any reason mines were placed, and they are not removed forthwith, the military consequences to Iran will be at a level never seen before,” Trump wrote on his social media platform Truth Social.
He added that removing the mines would be “a giant step in the right direction.”
The warning came after a CNN reported that Iran has begun laying mines in the strait in an effort to further prevent US or Israeli linked shipping from passing through the key trading route.
Sources told the news outlet that only a few dozen had been placed so far, but Iran still had up to 90% of its small boats and mine-laying vessels intact, leaving it capable of deploying hundreds more.
The Strait of Hormuz is one of the world’s most critical energy chokepoints, with around 20 million barrels of oil passing through it daily. Iran’s IRGC had previously announced the closure of the strait to transit following the start of the US-Israeli attacks on Iran on Feb. 28, pushing oil prices above and raising fears of a prolonged global energy disruption.
The escalation in the Middle East flared since Israel and the US launched a joint attack on Iran on Feb. 28, and to date killing more than 1,200 people, including Ayatollah Ali Khamenei, who was the supreme leader. At least eight US service members have been killed since the beginning of the campaign.
Iran has continued to fight back despite facing major attacks from Washington and Tel Aviv. According to Iranian leaders, they have rejected efforts by US allies to end the fighting and return to negotiations.
Iran’s president said that Iran will never surrender despite US efforts.
Those dreaming of Iran’s unconditional surrender “will take that dream to their graves,” President Masoud Pezeshkian said on Saturday.
