Brent Crude Surges 10% to $80 as Iran Conflict Sparks Fears of $100 Oil

Brent Crude Surges 10% to $80 as Iran Conflict Sparks Fears of $100 Oil​

Brent crude prices jumped 10% to around $80 per barrel on Sunday, as escalating US and Israeli strikes on Iran pushed the Middle East into renewed conflict and triggered fears of a major supply disruption.

Oil traders reported sharp gains at the start of trading, with analysts warning that prices could climb to $100 per barrel if tensions continue and the Strait of Hormuz remains closed.

Strait of Hormuz Closure Emerges as Critical Risk​

According to Ajay Parmar, director of energy and refining at ICIS, the immediate military strikes are supportive of oil prices. However, the more decisive factor is the potential closure of the Strait of Hormuz.

Tehran has warned ships against using the strategic waterway, prompting most tanker owners, major oil companies, and trading houses to suspend shipments of crude oil, fuel, and liquefied natural gas through the strait. Trade sources confirmed widespread caution among shipping operators.

The Strait of Hormuz is one of the world’s most vital energy corridors, with more than 20% of global oil supplies passing through it. Any prolonged disruption is expected to have a substantial impact on international markets.

Parmar stated that prices could open much closer to $100 per barrel and potentially exceed that level if the closure persists.

Analysts Flag Potential $100 Per Barrel Scenario​

Middle East leaders have cautioned Washington that a broader war involving Iran could drive oil prices beyond $100 per barrel. RBC analyst Helima Croft and analysts at Barclays echoed similar projections, highlighting the scale of the geopolitical risk.

Energy consultancy Rystad Energy projected that prices could rise by $20 to around $92 per barrel when markets reopen.

Supply Loss Could Reach 10 Million Barrels Per Day​

The net supply impact from a full closure of the Strait of Hormuz could result in a loss of 8 million to 10 million barrels per day of crude oil, even after diverting partial flows through Saudi Arabia’s East West pipeline and the Abu Dhabi pipeline, according to Rystad energy economist Jorge Leon.

While alternative infrastructure exists to bypass the strait, it would not fully offset the disruption.

OPEC+ Announces Modest Output Increase​

Amid the crisis, the OPEC+ alliance agreed on Sunday to increase output by 206,000 barrels per day starting April. The increase represents less than 0.2% of global demand and is unlikely to fully counterbalance potential supply losses stemming from the conflict.

Asian Governments Review Stockpiles and Shipping Routes​

The intensifying Iran crisis has also prompted Asian governments and refiners to review strategic oil stockpiles, assess alternative shipping routes, and secure backup supply arrangements to mitigate risks tied to the Strait of Hormuz.

With energy markets on edge, attention now turns to whether the disruption remains temporary or evolves into a prolonged supply shock capable of reshaping global oil dynamics.