U.S. crude oil prices soared past $100 per barrel on Sunday, continuing their rapid ascent as the American-Israeli war with Iran shows no signs of abating. The surge comes amid heightened tensions, with President Donald Trump threatening further strikes on Iran's key oil export infrastructure located on Kharg Island, which handles about 90% of Iran's oil exports [1][2]. U.S. crude futures jumped more than 2% to around $102 per barrel, while Brent crude, the international benchmark, rose to $106 per barrel [1]. CNBC World reported U.S. crude oil rose 2.64% to $101.32 per barrel by 6:15 p.m. ET, and Brent was up 2.94% to $106.17 per barrel [2].
The conflict has led to significant disruptions in global oil supply. Iranian attacks on ships and infrastructure have effectively closed the critical Strait of Hormuz, through which more than 20% of the world's oil supply must pass [1][2]. The closure has triggered what CNBC World describes as the biggest oil supply disruption in history, with oil prices rising more than 40% since the U.S. and Israel attacked Iran three weeks ago [2]. NBCBusiness notes that since the war started, U.S. oil prices have risen nearly 50%, and so far this year, the cost of U.S. crude has increased by almost 75% [1]. Retail gas prices have also surged, with the national average price per gallon of unleaded gas reaching $3.70, up about 70 cents since the conflict began [1].
On Friday, the U.S. intensified its military pressure by striking Kharg Island, but Trump stated that the strikes did not impact the island's oil infrastructure [1][2]. However, he warned that further attacks on crude infrastructure are possible if Iran continues its aggression in the Strait of Hormuz [2]. JPMorgan analysts noted that a direct strike on Iran's export terminal would immediately halve its crude exports of 1.5 million barrels per day and likely trigger severe retaliation against regional energy infrastructure [2].
Efforts to stabilize the market have included the International Energy Agency's unanimous agreement among 32 countries to release a collective 400 million barrels of oil in the largest ever emergency release. This temporarily pushed oil prices below $80 per barrel, but prices quickly resumed their upward trend [1]. The White House is considering naval escorts to protect oil tankers, with plans to announce multinational cooperation soon, though details on timing remain unclear [1][2]. Energy Secretary Chris Wright indicated that military escorts may not be possible for several weeks [1]. RBC Capital Markets’ Helima Croft emphasized that reopening the Strait of Hormuz is crucial for resolving the crisis and restoring confidence to shipping companies [1].
Forward-looking statements from analysts and officials highlight ongoing risks. JPMorgan's Natasha Kaneva warned that any direct strike on Kharg Island's oil export facilities would provoke severe retaliation and further disrupt regional energy infrastructure [2]. The U.S. ambassador to the United Nations, Mike Waltz, reiterated that Trump is maintaining the option to target Iran's energy infrastructure if necessary [2].
CONCLUSION
The escalation of the U.S.-Israeli conflict with Iran has driven oil prices to historic highs, with the closure of the Strait of Hormuz causing unprecedented supply disruptions. Despite emergency measures and diplomatic efforts, market sentiment remains negative due to ongoing threats and the potential for further escalation. Analysts and officials agree that reopening the Strait is essential for stabilizing global energy markets.