Oil prices hit over $100 for the first time since 2022! The US-Iran conflict continues to escalate, and more Middle Eastern oil-producing countries are cutting production.

Due to the Iran conflict causing the Strait of Hormuz to remain closed, more major Middle Eastern oil-producing countries have reduced their output. International oil prices broke through $100 per barrel on Monday for the first time since the outbreak of the Russia-Ukraine conflict in 2022.

The current round of oil price increases is the fastest since the 1980s, with no signs of slowing down.

Data shows that on Monday, both WTI and Brent crude opened sharply higher and quickly surpassed the $100 mark, with prices exceeding $110 at their peak. As of press time, WTI crude futures rose 18.67% to $107.87 per barrel; global benchmark Brent crude futures increased 16.78% to $108.24 per barrel.

Since the conflict began, Brent and WTI prices have risen over 50% and 60%, respectively.

Since the U.S. and Israel launched airstrikes on Iran on February 28, triggering Iran’s fierce retaliation, oil prices have surged significantly, marking the largest weekly gain since at least 1985.

This conflict has nearly halted the vital energy shipping route, the Strait of Hormuz. Connecting the Persian Gulf with global markets, this route handles about 20 million barrels of oil daily, accounting for one-fifth of global seaborne oil supply.

According to data from commodity analytics firm Vortexa, approximately 16 million barrels of oil are blocked daily due to the strait’s closure, unable to reach global markets.

Andy Lipow, President of Lipow Oil Associates, said, “As the conflict continues, tankers cannot load, leading to a surge in crude oil inventories. The psychological threshold of $100 per barrel may just be a short-term milestone on the way to higher prices.”

Vikas Dwivedi, a strategist at Macquarie Group, wrote in a recent client report: “If the Strait of Hormuz remains closed for several weeks, a chain reaction could occur, potentially pushing crude prices to $150 per barrel or higher.”

Several Middle Eastern countries are now involved in the Iran conflict. Infrastructure such as airports, apartment buildings, and military bases in Saudi Arabia, the UAE, Bahrain, and others have been targeted by Iranian missiles and drones. The conflict is gradually spreading to energy infrastructure in the Middle East, further threatening an already strained supply chain.

With the closure of the Strait of Hormuz preventing oil exports and storage filling up rapidly, more oil-producing countries are forced to cut production, indicating a more severe supply shortage. Recent weekend reports indicate that after Iraq, the UAE and Kuwait have also begun reducing oil output…

JPMorgan analysts estimate that if the strait remains blocked, global oil production could decrease by 3.3 million barrels per day by day 8, rise to 3.8 million barrels per day by day 15, and reach 4.7 million barrels per day by day 18.

The surge in oil prices has begun to impact domestic gasoline prices in the U.S. The American Automobile Association (AAA) reports that the national average gasoline price on Sunday was $3.45 per gallon, up 15% from $2.984 a week earlier.

Goldman Sachs economists stated in a report last Friday that if oil prices “temporarily rise to $100 per barrel,” the global inflation rate could increase by 0.7 percentage points, and the global economic growth could slow by 0.4 percentage points.

The U.S. is downplaying the impact of the oil price surge. On Sunday, U.S. President Trump predicted that after the conflict ends, oil prices will “drop rapidly.”

U.S. Energy Secretary Chris Wray said that the recent spike in oil prices reflects a temporary “panic premium” related to the Iran conflict. Since global energy supplies remain sufficient, this situation is unlikely to last.