Oil prices surged about 20% in early trade on Monday, hitting their highest since July 2022, as the expanding U.S.-Israeli war with Iran fuelled fears of tighter supply and prolonged disruptions to shipments through the Strait of Hormuz.
Iran on Monday named Mojtaba Khamenei to succeed his father Ali Khamenei as Supreme Leader, signalling that hardliners remain firmly in charge in Tehran a week into its conflict with the United States and Israel.
Brent crude futures rose as much as $18.35, or 19.8%, to $111.04 a barrel and were up $14.38, or 15.5%, at $107.07 as of 2314 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up $15.27, or 16.8%, at $106.17, after rising as much as $20.34, or 22.4%, to $111.24 earlier in the session.
Brent climbed 27% and WTI rose 35.6% last week, before the latest jumps.
Israel’s military said it hit Iranian commanders in the Lebanese capital early on Sunday, expanding the scope of its campaign to the heart of Beirut after days of strikes that have left nearly 400 people dead.
Israel’s military has threatened to kill any replacement for Khamenei, while U.S. President Donald Trump said the war might only end once Iran’s military and rulers had been wiped out.
The war could leave consumers and businesses worldwide facing weeks or months of higher fuel prices even if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics and elevated risks to shipping.
Top oil exporter Saudi Arabia is increasing shipments from the Red Sea, but the volumes are far from enough to offset the drop from the crisis-hit Strait of Hormuz, shipping data showed.
(Reporting by Yuka Obayashi; Editing by Sam Holmes and Jamie Freed)