Brent crude surged above $97 per barrel on Monday, jumping more than 4% as fresh tensions between Iran and Israel reignited fears of disruptions to global oil supplies.
The latest spike comes after both countries exchanged missile strikes, raising concerns that the conflict could escalate further and undermine ongoing diplomatic efforts aimed at securing a ceasefire. While political leaders continue to push for negotiations, energy markets are reacting to a simpler reality: uncertainty.
At the centre of investor concerns is the Strait of Hormuz, one of the world’s most critical oil transit routes. A significant share of global crude exports passes through this narrow corridor, meaning any disruption can quickly ripple through international markets. Even the perception of supply risks is often enough to send prices sharply higher.
What makes the current situation particularly interesting is that oil prices are rising despite OPEC+ approving another increase in production quotas for July. Under normal circumstances, more supply would help ease prices. Instead, traders appear more focused on geopolitical risks than on additional barrels entering the market.
For businesses and consumers, higher oil prices rarely stay confined to energy markets. They often feed into transportation costs, inflation, production expenses, and ultimately the prices paid for goods and services.
Oil is once again approaching the psychologically important $100-per-barrel mark. Whether it gets there will depend less on production targets and more on what happens next in the Middle East.
