New Delhi, Mar 9: Global oil prices surged sharply in early Asian trading on Monday, briefly breaching the USD 100-a-barrel mark and touching as high as USD 111 per barrel, marking a dramatic rise of nearly 20 percent within minutes as markets reacted to escalating tensions in the Gulf region.Traders had already been predicting that crude prices would cross the USD 100 mark this week, but the speed of the spike surprised markets.
Oil jumped about 10 percent in roughly a minute and then climbed another 10 percent over the next 15 minutes during the opening phase of Asian trading, BBC reporter.The surge followed a weekend of escalating conflict and attacks on energy infrastructure across Iran and several Gulf states.
Markets that had previously remained relatively calm over the possibility of disruptions to oil and liquefied natural gas supplies are now reacting with alarm.One of the biggest concerns for global energy markets is the potential disruption of shipping through the Strait of Hormuz, one of the world’s most critical energy choke points. Millions of barrels of crude oil and large quantities of liquefied gas pass through the narrow waterway every day, and fears are mounting that tankers may become unable or unwilling to transit the route.Energy analysts warn that if the Strait of Hormuz remains effectively shut until the end of March, oil prices could surge to record levels, potentially exceeding USD 150 per barrel.The current spike is expected to push up petrol prices globally and raise costs for key derivative products such as jet fuel.It may also affect fertiliser production, as many of the chemical inputs used in fertilisers are derived from petroleum products.Much of the oil exported from the Gulf is consumed in Asia, but the ripple effects are already being felt elsewhere.There are early signs that Asian buyers are bidding up prices for liquefied natural gas from the United States.Some tankers that were originally headed toward Europe are reportedly turning around in the mid-Atlantic to redirect supplies to Asian markets where demand is rapidly increasing.Despite the market turmoil, US President Donald Trump sought to play down the price spike, suggesting that higher oil prices would be temporary.In a post on his social media platform Truth Social, Trump said the surge in oil prices was a “small price to pay” for global security.“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for USA and World Safety and Peace,” he wrote. “ONLY FOOLS WOULD THINK DIFFERENTLY!” The sharp rise in crude prices marks the biggest market shock since Russia’s invasion of Ukraine in February 2022, which had triggered a global energy crisis.
Meanwhile, security concerns across the Gulf continue to mount.With several Gulf states reporting drone attacks linked to Iran, the US State Department has ordered non-emergency US government personnel and their family members to leave Saudi Arabia, citing safety risks.The department has also advised American citizens to reconsider travel to Saudi Arabia, warning of the risk of Iranian drone and missile attacks on US interests, as well as the possibility of armed conflict, terrorism, exit bans and strict local laws, including those related to social media activity.
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