Oil prices briefly touched $80 a barrel on Sunday evening as the Iran conflict threatens to disrupt global energy supply through the Strait of Hormuz.
Brent crude futures reached as high as $82.37 a barrel before trading at $78.21 as of 4.30am UAE time. West Texas Intermediate, which tracks US crude, was up more than 6.85 per cent at $71.61 a barrel.
Traders were waiting anxiously for the impact that the Iran conflict would have on global energy markets, with some analysts anticipating oil prices could touch $100 a barrel in a worst-case scenario.
The source of that anxiety is the Strait of Hormuz, a critical chokepoint through which one fifth of global oil supply passes. Data from the US Energy Information Administration (EIA) reported oil flow through the strait averaged about 20 billion barrels per day in 2024 and 2025.
Three tankers were attacked on Sunday while sailing through the chokepoint, a day after the Iranian Navy instructed ships to avoid the strait, according to industry operators.
“The key question is when do vessels re-establish export flows,” Alan Gelder, senior vice president of refining, chemicals and oil markets at Wood Mackenzie, said in a note.
“No doubt, tanker rates and insurance will increase dramatically, but these costs would only be a small part of the oil price impact associated with a curtailment of oil flows if they last for more than a few days.”
The Gulf Co-operation Council called for an immediate end of Iranian strikes against Arab nations to ensure the safety of supply and the stability of global energy markets.
“The council also expressed full solidarity among the GCC states and their united stand against these attacks, stressing that the security of its member states is indivisible, and that any attack on any member state is a direct attack on all GCC states,” it said in a statement after a ministerial meeting.
Earlier on Sunday, Opec+ said it had agreed to increase output by 206,000 barrels per day beginning in April. That fell between the 137,000 bpd – a case anticipated by most analysts, but it was a more moderate decision compared to the increases of between 400,000 and 500,000 that were also suggested.
The bloc had said it was retaining its flexibility “to increase, pause or reverse the phase out of the voluntary production adjustments” as it assesses market conditions.
The meeting became one of the most consequential for Opec as traders continue to assess threats to Gulf oil flows.
“If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets,” Jorge Leon, senior vice president at Rystad Energy, said in a note.
Gold and dollar gain, while US stock futures slip
Meanwhile, the price of gold went up as traders rushed to the safe-haven asset. The precious metal was up by 2.43 per cent at $5,375.20 an ounce.
The US dollar also saw gains as investors flocked for safety amid the conflict, with the dollar index up 0.33 per cent at 97.93
Fears of a supply disruption through the Strait of Hormuz extended to Wall Street, with futures on all three main indexes trading lower in overnight trading.
Stock markets in the Asia-Pacific tumbled, with Japan's Nikkei 225 down more than 2 per cent. Australia's S&P/ASX 200 was down 0.46 per cent in early trading, while stock markets in South Korea were closed for a public holiday.
Futures on the Dow Jones Industrial Average tumbled by 1.19 per cent, or 582 points. Futures on the S&P 500 and Nasdaq Composite were both down 1.09 per cent.
The decline in US futures comes as most Gulf stock markets remained closed after Iran's strikes on Arab countries. The Abu Dhabi Securities Exchange and the Dubai Financial Market will be closed at least until Tuesday, the Capital Market Authority said. The CMA said updates on the resumption of trading will be provided in due course.
Trading on Bourse Kuwait will be suspending until further notice, while the Qatar Exchange in Doha was also closed on Sunday.
