International oil prices soared to more than $119 a barrel on Monday, hitting their highest level since mid-2022, as major oil-producing countries cut supply due to the expansion of the war between the United States and Israel against Iran, and the market worried about long-term shipping disruptions. Brent crude futures were up $13.02, or 14%, at $105.71 a barrel by 09:17 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up $12.16, or 13%, at $103.06 a barrel.
In volatile trading, Brent crude oil hit an intraday high of $119.50 a barrel, marking its largest one-day absolute gain in history, while WTI crude oil hit $119.48 a barrel. Before Monday's surge, Brent had gained 28% last week and WTI was up 36%.
About a fifth of the world's oil and liquefied natural gas typically travel through the Strait of Hormuz, which is now virtually blocked. In addition, Mojtaba Khamenei was appointed to succeed his father Ali Khamenei as Iran's supreme leader, a signal that Tehran's hardliners still firmly control power a week after the war with the United States and Israel.
Even if the conflict that began on February 28 ends quickly, consumers and businesses around the world are likely to face weeks or even months of higher fuel prices as energy suppliers grapple with damaged facilities, logistics disruptions and rising shipping risks.
U.S. gasoline futures surged to their highest level since 2022, at about $3.22 a gallon. U.S. President Trump has previously told American consumers that the impact of the conflict on the cost of living will be limited before the midterm elections in November.
Governments can respond to supply disruptions by releasing strategic oil reserves. U.S. Senate Democratic leader Chuck Schumer has called on Trump to take this step, and French government sources also said on Monday that the Group of Seven (G7) would discuss the matter.
Oil production at Iraq's main southern fields has fallen by 70% and crude stockpiles have reached maximum capacity, sources said.
Kuwait Petroleum Co. began cutting oil production on Saturday and declared force majeure on shipments, but did not say how much output would be shut down.
Analysts expect OPEC heavyweights the United Arab Emirates and Saudi Arabia to soon be forced to cut production as their oil inventories run out.
In a rare move, Aramco sold more than 4 million barrels of Saudi crude through tenders as export routes were blocked.
In the natural gas market, Qatar, a major global LNG exporter, has halted production following attacks on critical infrastructure.
A fire broke out in the Fujairah oil industry zone in the United Arab Emirates due to falling debris. No casualties were reported. Saudi Arabia's Ministry of Defense said on the social platform X that it had intercepted a drone heading to the Sheba oil fields.
Refinery outages further exacerbated fuel supply shortages. Bahrain National Petroleum Company (BAPCO) declared force majeure following a recent attack on its refinery complex. Saudi Arabia has shut down its largest oil refinery.