Oil prices spike nearly 10% as US-Iran conflict escalates, fueling fears of global supply shock

Global oil prices surged nearly 10% on Monday, their biggest one-day gain in years, after the US military intensified operations against Iran and announced tougher maritime measures around the Strait of Hormuz, stoking fears of a prolonged disruption to one of the world's most important energy corridors.

Brent crude, the international benchmark, jumped $7.14, or 9.4%, to $83.15 a barrel, while U.S. benchmark West Texas Intermediate (WTI) climbed $6.68, or 9.35%, to $78.09.

Gasoline futures rose nearly 6% and heating oil gained more than 8%, signaling expectations of higher fuel costs.

Meanwhile, investors moved away from precious metals, with gold falling 2.9% and silver dropping 3.7%.

The rally followed a sharp escalation in the Gulf after President Donald Trump ordered additional military action against Iran and announced that the US would reinstate a naval blockade targeting Iranian shipping beginning this week.

The renewed confrontation comes after successive US strikes on Iranian military targets and Tehran's attacks on commercial vessels in the Strait of Hormuz.

The Strait of Hormuz carries about 20% of the world's oil consumption and a significant share of global liquefied natural gas exports.

Any threat to shipping through the narrow waterway immediately reverberates across energy markets because major exporters — including Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and Qatar — depend on the route to reach international customers.

Oil prices had retreated in recent weeks after hopes of a ceasefire eased concerns over supply disruptions.

Those gains were reversed after renewed fighting, with traders pricing in the risk of reduced exports, shipping delays and higher insurance costs for tankers operating in the Gulf.

Despite Monday's surge, Brent remains well below the nearly $120-a-barrel peak reached during the height of the 2026 Iran conflict.

The spike in crude also rippled through global financial markets.

Wall Street stocks closed lower as investors worried that higher energy prices could reignite inflation, complicate central banks' plans for interest-rate cuts and weigh on corporate earnings.

Technology shares led the decline while Treasury yields moved higher.

Analysts said oil markets are likely to remain highly volatile in the coming days as traders monitor whether military operations expand further and whether commercial shipping through the Strait of Hormuz continues uninterrupted.

Any sustained disruption to Gulf exports could tighten global supplies and place additional upward pressure on fuel prices worldwide.