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Oil Prices Surge Over 3% on Reports of US-Iran Military Strikes in Middle East
Oil prices climbed more than 3% in Monday trading as escalating military conflict between the United States and Iran stoked fears of a significant disruption to global energy supplies.
The surge reflects a growing geopolitical risk premium being priced into the market, with traders reacting to reports of attacks that threaten tanker traffic in the Middle East.
Price Movement
According to a Reuters report, both major crude benchmarks saw sharp increases as markets opened for the week.
- Brent crude futures, the international benchmark, rose $2.67, or 3.51%, to trade at $78.68 a barrel.
- U.S. West Texas Intermediate (WTI) crude futures gained $2.48, or 3.47%, to reach $73.89 a barrel.
AdMarket Impact
The price jump is a direct response to reports that Iran expanded strikes on Gulf states following U.S. military action. This escalation raises immediate concerns about the security of the Strait of Hormuz, a critical chokepoint for global oil shipments.
A significant portion of the world's seaborne oil passes through the strait daily. Any disruption or closure of this waterway could severely tighten global supply and lead to a sustained period of higher energy prices, impacting inflation and economic growth worldwide.