Oil prices surged about 6% to reach their highest levels since 2024, as the U.S.-Israel war against Iran intensifies and affects Middle East energy shipments.
Brent crude futures rose $4.70 (6.1%) to $82.44 a barrel, while U.S. West Texas Intermediate rose $4.43 (6.2%) to $75.66.
The big picture: Iraq, the second-largest OPEC producer, has cut production by nearly 1.5 million barrels per day, with possible further reductions if the crisis continues.
- Analysts say Iran’s broader retaliation and regional flashpoints pose serious risks to energy supplies, especially in the Strait of Hormuz. Israel has attacked Lebanon; Iran has struck energy infrastructure and tankers in the Gulf and Strait of Hormuz, a key route for global oil and gas.
- Insurance cancellations have forced tankers and shipping companies to avoid the Strait, leading to soaring global oil and gas shipping rates.
- Iran has threatened to fire on any ship attempting to pass through the Strait of Hormuz, causing further shipment concerns.
What we’re watching: President Trump stated U.S. and Israeli air attacks could last four to five weeks but might extend longer, weighing insurance support for oil tankers.
Go deeper: U.S. diesel futures jumped around 12%, and gasoline futures rose about 4%, both hitting their highest levels since 2023 and 2024, respectively.
- Refining profit margins (crack spreads) and prices for natural gas in Europe and Asia have surged.
- The price premium of Brent over WTI climbed to $8 a barrel, the highest since November 2022, which may support more U.S. crude exports.
