Oil prices recorded one of their largest single-day gains in history on Monday, with Brent crude rising to $117.70 and WTI climbing to $117.50, each up roughly 27 to 29 percent, as a major escalation in the Iran conflict sent shockwaves through global energy markets.
The rally was triggered by a rapid deterioration of security conditions across the Persian Gulf. Israeli forces launched fresh strikes on targets in central Iran and Lebanon, hitting infrastructure linked to the Iranian regime and Hezbollah. In response, Iran expanded its drone and missile campaign across the Gulf, with attacks striking Saudi Arabia, Bahrain, and other regional allies.
Tanker traffic through the Strait of Hormuz, the world's most critical oil shipping chokepoint, has collapsed, leaving major Gulf producers with nowhere to send their crude. Iraq has been the hardest hit, with output falling roughly 60 percent from approximately 4.3 million barrels per day to around 1.7 million barrels per day. Kuwait and the United Arab Emirates have also begun cutting production as onshore storage fills rapidly.
Saudi Arabia, a key stabilizer in global oil markets, confirmed that four drones targeting the Shaybah oilfield were intercepted and destroyed. Saudi authorities also reported casualties near Riyadh after a projectile struck a residential compound, and the kingdom's Ministry of Foreign Affairs issued a sharp condemnation of what it described as Iranian attacks targeting civilian and energy infrastructure.
Adding further uncertainty to the situation, Iran's Assembly of Experts named Mojtaba Khamenei, son of the slain Supreme Leader Ali Khamenei, as the country's new supreme leader. The appointment is widely interpreted as a signal that Iran will maintain its hardline posture despite mounting military pressure.
Global stock markets reacted sharply, with Hong Kong's Hang Seng falling over 3 percent and U.S. futures pointing to losses of more than 2 percent at the open.