Khamenei, successor to the late Ali Khamenei, reinforced the hardline leadership in Tehran, raising concerns over prolonged disruption of the Strait of Hormuz—a vital shipping corridor for about 15 million barrels of crude daily, nearly 20% of global supply.Price Movements:
- Brent crude climbed to an early high of $119.50 per barrel, later retreating to $106.23.
- West Texas Intermediate (WTI) rose to $119.48 before dropping to $101.25.
The spike follows escalating attacks on energy infrastructure across the region. Bahrain accused Iran of targeting a desalination plant, while Israeli strikes reportedly hit oil depots in Tehran, causing fires and further uncertainty.
Many tankers have halted movements through the Persian Gulf due to missile and drone threats. Several Gulf producers, including Iraq, Kuwait, and the UAE, have also cut production as storage fills up amid limited export capacity.The surge has pushed fuel prices higher worldwide. In the U.S., the average price of gasoline rose to $3.45 per gallon, a 47-cent increase from the previous week, while diesel reached $4.60 per gallon.
Stock markets reacted sharply: Japan’s Nikkei 225 fell 5.2%, U.S. futures dropped over 1.5%, and the S&P 500 slid 1.3% on Friday. The Dow Jones briefly lost 945 points before closing 450 points lower.
Outlook:
Analysts warn that if oil prices stay above $100 per barrel for a sustained period, global economic strain could worsen, squeezing household budgets and dampening consumer spending. Natural gas prices have also climbed, reaching $3.33 per 1,000 cubic feet, up 4.6% from the previous session.
U.S. Energy Secretary Chris Wright suggested that fuel prices could fall below $3 per gallon in the near future, but ongoing Middle East tensions make stability uncertain.
The conflict shows no signs of immediate de-escalation, with Iran’s exports—around 1.6 million barrels daily, much of it destined for China—at risk of disruption, potentially driving global energy prices even higher.
This surge mirrors 2022’s price spikes following the Russian invasion of Ukraine, highlighting how geopolitical crises in key energy-producing regions can rapidly ripple across the global economy.
