NEW YORK: Oil prices jumped about 7 percent on Monday to settle at their highest since 2022, after soaring by as much as 29 percent during the session as Saudi Arabia and other OPEC members cut supplies during the expanding US-Israeli war with Iran.
Prices jumped over 20 percent in early trade and then retreated from session highs as the US and other Group of Seven (G7) countries considered tapping strategic petroleum reserves to limit inflation pressures from energy price increases. During the session, Brent futures rose USD6.27, or 6.8 percent, to settle at USD98.96 a barrel. US West Texas Intermediate (WTI) crude rose USD3.87, or 4.3 percent, to settle at USD94.77.
Those were the highest settlement prices for Brent and WTI since August 2022.
READ MORE: Oil pares gains but still on track for record surge as Iran war escalates
Shortly after settlement, WTI and Brent gave back all the session’s gains and traded below Friday’s settlement price.
Early in the session, Brent soared by USD26.81 to USD119.50 a barrel, and WTI hit a session high of USD119.48. Those were the highest intraday prices for both crude benchmarks since June 2022, comparable with all-time highs of USD147.50 a barrel for Brent and USD147.27 for WTI in July 2008. Since the US and Israel bombed Iran on February 28, Brent has surged by as much as 65% and WTI 78%.
In addition to energy supply disruptions, oil prices got a boost on Monday after Iran’s hardliners staged a show of force, taking to the streets to proclaim their loyalty to new Supreme Leader Ayatollah Mojtaba Khamenei, whose rise appeared to dash hopes of a swift end to war in the Middle East.
Saudi oil giant Aramco began cutting output at two of its oilfields, adding to reductions by the United Arab Emirates, Iraq, Kuwait and Qatar as shipments continue to be blocked and they run out of storage.
The war has virtually shut the Strait of Hormuz, through which roughly one-fifth of the world’s oil and liquefied natural gas passes. A Greek-operated oil tanker, however, sailed through the Strait with a cargo of Saudi crude in a sign that some commercial vessels are still attempting to navigate the vital passage.
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