Global crude oil price, on Monday, crossed the $100 per barrel mark, signalling the highest surge since July 2022.
Brent crude rose by 16 percent to $107.56, from a surge of $91 a barrel recorded on Friday.
Similarly, the US West Texas Intermediate increased by 13.96 percent to 103.59 percent.
The development comes as traffic through the Strait of Hormuz remains grounded due to the Middle East conflict, unleashing the most severe energy crisis since the 1970s and threatening the global economy.
There are also speculations that the global oil benchmark price could hit $120 today.
Hormuz — a narrow maritime passage connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea — is said to be the only sea route linking the Gulf’s oil and gas producers to global markets, making it one of the most strategically important waterways in the world.
According to the Wall Street Journal, the disruption has led to higher petrol and diesel prices at the pump, as well as increased mortgage rates and borrowing costs for the US government.
“One week into President Trump’s war on Iran, the most severe shock to energy markets since the 1970s is cascading through the world economy,” the report reads.
“The disruption quickly fed into higher gasoline and diesel prices at the pump, and higher mortgage rates and borrowing costs for the U.S. government, endangering Trump’s economic priorities.
“To be sure, the U.S. has more shock absorbers this time around. Oil is a far smaller component of gross domestic product than it once was, and the U.S. has become a top energy exporter in its own right.”
Chris Wright, US energy secretary, had said “energy will flow soon” through the Strait of Hormuz.
He blamed the rise in prices on “the unknown that this could be some long… drawn-out crisis. But it won’t be”.
However, the report said the impact will continue to be felt, particularly in Europe and Asia.
“For decades, the U.S. military and its allies have spent billions of dollars ensuring the Strait of Hormuz stays open,” the publication said.
“Just 21 miles across at its narrowest stretch, and flanked to the northeast by a sworn enemy of the West, the channel between Oman and Iran is a superhighway for about a fifth of global supplies of oil and liquefied natural gas.
“Massive amounts of fertilizer sail through these waters, feeding crops on every continent.”
According to the report, the few ships that have departed the strait since the start of the war were largely transporting Iranian oil.
“Traders say crude markets could soar even higher if the strait doesn’t open within days, either with U.S. naval escorts or because shipowners think the danger has receded,” the publication said.
The WSJ report also said the strait’s closure is spilling through commodity markets, adding that aluminum prices reached multiyear highs after smelters in the Middle East declared force majeure — a legal provision that frees suppliers from liability if they cannot deliver.
The ripple effect of the US-Iran war has trickled down to Nigeria as filling stations begin a gradual increase in petrol pump price.
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