Crude oil prices jumped more than 8% Sunday evening, as market participants fear war between the U.S. and Iran will spiral out of control and lead to a major supply disruption.
U.S. crude oil rose more than 8%, or $5.55, to $72.57 per barrel by 6:41 p.m. ET. Global benchmark Brent jumped about 9%, or $6.54, to $79.41.
The massive wave of airstrikes launched by the U.S. and Israel against Iran have killed Supreme Leader Ayatollah Ali Khamenei and other top officials in the Islamic Republic. See the latest developments here.
It is unclear who will ultimately govern the fourth-largest oil producer in OPEC. How the oil market ultimately reacts will depend on whether the war leads to a prolonged disruption to traffic through the Strait of Hormuz, the most important chokepoint in the world for the global oil trade.
“We view the pace of the rebound in traffic through Hormuz and the extent of Iranian retaliation as key for the oil price in the next few days,” UBS analysts led by Henri Patricot told clients in a Sunday note.
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President Donald Trump said Sunday that combat operations will continue until all U.S. objectives have been met. Trump said earlier that Iran wants to talk and he has agreed to do so, leaving open the possibility of de-escalation that avoids a big, prolonged disruption.
“They want to talk, and I have agreed to talk, so I will be talking to them,” Trump told The Atlantic on Sunday. The president told CNBC that U.S. military operations in Iran are “ahead of schedule.”
Tanker traffic through the Strait has already effectively come to a halt as shipping companies take precautionary measures, according to consulting firm Rystad Energy.
“Tankers are starting to build by the Strait of Hormuz, but nothing seems to be going through at the moment – tankers are definitely spooked,” said Matt Smith, oil analyst at energy consulting firm Kpler.
More than 14 million barrels per day passed through the Strait on average in 2025, or about a third of the world’s total seaborne crude exports, according to Kpler data. About three-quarters of those exports go to China, India, Japan and South Korea, according to the firm.
Brent could hit $100 per barrel as the security situation in the Middle East spirals, Barclays analyst told clients in a Saturday note. It is possible that the market is looking at a material disruption that sends Brent spot prices above $120 per barrel, the UBS analyst told their clients.
“How this ends is extremely uncertain at this point but in the meantime oil markets will have to face their worst fears,” Barclays analyst Amarpreet Singh told clients. “The potential effect on oil markets is hard to overstate.”
Iranian oil exports could also collapse amid uncertainty about how is in charge in Tehran, domestic unrest, and labor strikes in its oil producing regions and ports, said Andy Lipow, president of Lipow Oil Associates. Iran produces about 3.3 million bpd.
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