Crude oil benchmarks surged past the $100-per-barrel threshold on Monday, marking the first time in nearly four years that prices crossed into triple digits. Traders saw oil futures spike so sharply that values briefly neared $120 overnight before reports of potential international measures to ease fuel costs tempered the rally.
By Monday morning, futures for US crude had climbed about 11%, rising $8 to settle around $99 per barrel, while Brent crude jumped $9 to approximately $101. Both benchmarks recorded their largest single-day dollar gains ever, though neither matched the record $11 increase. The previous high-water mark was a $10.75 jump set on June 6, 2008.
Supply Disruptions Propel Prices Higher
Analysts attribute the price surge to two main factors tied to the ongoing conflict with Iran: a near shutdown of tanker traffic through the Strait of Hormuz and curtailed output across the Middle East. Nearly 20% of the world’s oil moves through the narrow waterway, but Iran’s threats to target any vessel passing through have brought shipments to a virtual standstill.
Rapidan Energy Group’s historical data shows that the current estimated disruption of roughly 20% of global supply is about double the impact of the Suez Crisis in 1956–57. At the same time, spare production capacity—often the market’s shock absorber—has been effectively eliminated as Saudi Arabia and the United Arab Emirates find themselves cut off from key export routes.
“The result is a market with no meaningful cushion. There is no swing producer to step in,” wrote Bob McNally, Rapidan’s founder and president, in a note to clients. With tankers unable to offload, regional producers are running out of storage and have started to throttle back output.
Ripples Through Retail Prices and Future Contracts
As crude costs have climbed, US gasoline prices have jumped by about 50 cents in the past week, reaching an average of $3.48 per gallon—higher than any point during President Donald Trump’s tenure. Still, traders say the current crisis may prove temporary. Looking at futures contracts for delivery in 2027 and 2028, “oil futures are trading in the high $60s,” noted Dan Pickering, founder and chief investment officer at Pickering Energy Partners.
But the conflict shows no immediate signs of abating. “I would say that the move is a bit overdone in the very short term, but if between now and the end of March you don’t have an amelioration of traffic around the strait, we could go to $150 a barrel,” said Homayoun Falakshahi, lead crude research analyst at Kpler.
Government Efforts to Stabilize Markets
Policy makers are exploring options to relieve price pressures. G7 finance ministers planned discussions on Monday about a coordinated release of strategic oil reserves, while the Trump administration continued to push an insurance program for tankers navigating the strait after maritime underwriters balked at covering vessels at risk of attack.
The White House also said it would work to secure naval escorts for ships, but no operational plan has been announced and shipping firms remain wary of transiting the area amid the conflict.
“The higher the price goes, the more pressure on the Trump administration to do something to protect the strait,” said Pickering. “The longer it takes to re-open, the more upward pressure on price. A reinforcing cycle.”
