New Delhi
Oil prices surged on Monday as tensions grew between Israel and Iran, raising fears about the security of energy supplies from the Middle East. Brent crude rose by up to 5.5% before settling near $75 a barrel.
The increase followed reports of an Israeli attack on Iran’s giant South Pars gas field, which disrupted a production platform. Analysts warned that prices may rise more only if major oil routes are threatened, such as the Strait of Hormuz, or if Iran-backed groups like Yemen’s Houthis target ships.
Julius Baer’s Norbert Rucker noted that oil markets often react strongly to conflict. He said oil prices usually spike briefly during geopolitical tensions and then return to normal. Historically, such spikes average below 20% and last up to three months.
The conflict comes as nuclear talks between the US and Iran have failed. Iran warned it would retaliate against US bases in the region if attacked, prompting the US to withdraw some personnel.
Iran produces 3.3 million barrels of oil per day, around 3% of global output, and exports 1.5 million barrels daily—mostly to China. Much of the region’s oil flows through the Strait of Hormuz, a key passage Iran has previously threatened to block.
According to Emkay Global, a wider conflict affecting oil producers like Saudi Arabia, Iraq, Kuwait, or the UAE could cause a sharp price spike. The global market is watching closely, as any disruption could impact supply and raise fuel prices worldwide.