Oil Prices Soar Iran Conflict as US and Israel bombard Iran, Strait of Hormuz closes, and energy costs surge amid global market volatility

Oil prices extended gains on Tuesday as the escalating conflict between the United States, Israel, and Iran disrupted regional energy flows and sparked fears of a fresh energy crisis.

The Strait of Hormuz, a key maritime passage through which roughly 20 percent of the world’s oil transits, has been effectively blocked, following missile and drone strikes by Iran targeting neighbouring states, including Saudi Arabia, Qatar, and Dubai.

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Analysts warn that prolonged disruption could inflate energy prices and fuel global inflationary pressures.

US President Donald Trump stated that the military campaign, which began Saturday with a strike that killed Iran’s supreme leader, Ayatollah Ali Khamenei, was “substantially” ahead of schedule, but cautioned that hostilities may continue for over four weeks.

Market reactions included a near 14 percent spike in oil prices on Monday, with crude rising a further two percent on Tuesday.

European natural gas prices jumped almost 40 percent after Qatar halted liquefied natural gas production. Equities retreated across Asia, led by a 7 percent plunge in Seoul’s tech-driven market.

National Australia Bank analyst Rodrigo Catril commented, “A spike in energy prices creates a dilemma for central banks. Stagflation is very uncomfortable; a longer-lasting energy shock is inflationary, and at the same time it weakens growth.”

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A general in Iran’s Revolutionary Guards warned of further action, saying pipelines and ships would be targeted if the region’s energy exports continue.

With uncertainty persisting, analysts predict sustained volatility in global commodities and currency markets as the crisis unfolds.

Key Figures (0700 GMT):

• West Texas Intermediate: UP 2.2% at $72.81 per barrel
• Brent North Sea Crude: UP 2.8% at $79.92 per barrel
• Tokyo – Nikkei 225: DOWN 3.1% at 56,279.05
• Hong Kong – Hang Seng: DOWN 1.1% at 25,786.22
• Shanghai – Composite: DOWN 1.4% at 4,122.68