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Crude oil prices spiked on Monday to $79 a barrel, making it the highest in over a year, after the Israel-US strikes on Iran resulted in investors abandoning the prospect of a prolonged conflict in the Middle East.
Global oil benchmark Brent crude surged over 9 per cent to $79 a barrel for the first time since August 2024, with signals indicating a marginal drop from an early trading high of $82.
Additionally, the US West Texas Intermediate increased over 9 per cent to $73.06 a barrel.
The airstrikes have resulted in the closure of the Strait of Hormuz, a vital channel through which about 20 per cent of global seaborne oil passes.
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The above triggered supply fears, with equity markets in Asia sinking and Tokyo, Hong Kong, Singapore, Mumbai, Bangkok, Wellington and Taipei all deep in the red.
Reuters reports that a prolonged surge in oil prices could lead to global inflationary pressures and effectively act as a tax on businesses and consumers, potentially weakening demand.
Notably, the spike in oil prices overshoots Nigeria’s budget benchmark, trading above the proposed 2026 reference price of $64.85 per barrel.
