Oil prices surged on Monday as fears mounted that the escalating Iran conflict could drag on for weeks, rattling global energy markets.
Global benchmark Brent crude jumped more than 8.5%, or $6.40, to $79.20 a barrel following U.S. and Israeli strikes on Iran that killed Supreme Leader Ali Khamenei.
U.S. West Texas Intermediate also surged 7.8%, or $5.35, to $72.30 per barrel after briefly hitting $75.33 — its highest since June of last year – on Sunday.
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Analysts at Citi warned that prices could climb further if the conflict persists, projecting Brent could trade between $80 and $90 a barrel in the coming days.
Israel launched fresh strikes on Iran Sunday, with Tehran responding with new missile barrages, further escalating tensions in a region responsible for a significant share of the world’s oil production, Reuters reported.
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Missiles on Sunday also struck several oil tankers near the Strait of Hormuz — the world’s most critical oil export route — killing one crew member and raising alarms across global markets, Reuters reported.
As tensions mounted Sunday, more than 200 vessels — including oil and liquefied natural gas tankers — were anchored near the passage which carries roughly 20% of the world’s oil supply, according to Reuters.
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Iran reportedly moved to restrict navigation along the Strait of Hormuz following the strikes.
Major exporters, including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Iran, depend heavily on the route.
Reuters contributed to this report.
