Oil prices surge on Iran war escalation as the expanding US-Israeli conflict with Iran fuels fears of prolonged disruption to shipping through the Strait of Hormuz and prompts supply cuts by major Middle Eastern producers.
Brent and US crude climbed sharply on Monday, reaching their highest levels since July 2022. The report links the jump to growing risks around the Hormuz chokepoint and tightening supply as storage fills and exports stall.
Iraq and Kuwait have begun cutting oil output, adding to earlier reductions in liquefied natural gas from Qatar, as shipments from the Middle East remain blocked, the report said.
Analysts warned the United Arab Emirates and Saudi Arabia could also be forced to cut output if storage capacity becomes a constraint while shipping remains disrupted.
The report said the shock could keep fuel prices elevated for weeks or months, even if the conflict ends quickly, due to damaged facilities, disrupted logistics, and higher shipping risk.
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Brent crude futures rose as much as $18.35 (19.8%) to $111.04 a barrel, while WTI climbed as much as $20.34 (22.4%) to $111.24, according to the report. The report also noted Brent and WTI logged steep gains last week before Monday’s fresh surge.
Iraq Output Falls, Kuwait Declares Force Majeure
The report said Iraqi production from main southern oilfields fell by 70% to 1.3 million barrels per day as exports via the Strait of Hormuz became impossible, citing industry sources. It added that crude storage reached maximum capacity, according to an official at the state-run Basra Oil Company.
Kuwait Petroleum Corporation began cutting output on Saturday and declared force majeure on shipments, though it did not specify the size of the reduction, the report said.
Iran’s attacks on oil infrastructure continued across the region, the report said. It cited a Fujairah Media Office statement that a fire broke out in the UAE’s Fujairah oil industry zone after debris fell, with no injuries reported.
Saudi Arabia’s defence ministry said it intercepted a drone heading to the Shaybah oilfield, according to the report.
