Due to the significant escalation of geopolitical tensions in the Middle East following the US and Israeli military strikes on Iran, international oil markets face the risk of supply disruptions. As a result, crude oil futures prices surged sharply at the start of new week trading on March 1.
As of 6:45 PM Eastern Time on March 1, the price of West Texas Intermediate (WTI) crude oil for April delivery on the New York Mercantile Exchange peaked at $75.33 per barrel, a 12.4% increase from the previous session’s closing price. Meanwhile, Brent crude oil futures for May delivery in London peaked at $82.37 per barrel, up 13% from the prior session’s close.
The United States and Israel launched military strikes against Iran on February 28. That evening, Iran’s Islamic Revolutionary Guard Corps announced a ban on all vessels transiting the Strait of Hormuz. Currently, numerous tanker owners and traders have suspended shipping crude oil, fuel, and liquefied natural gas through this strategic waterway. According to a report from Iran’s Mehr News Agency on March 1, an unauthorized oil tanker attempting to pass through the Strait of Hormuz was struck and is “sinking.”
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and serves as the sole maritime outlet for crude oil exports from major Middle Eastern producers including Saudi Arabia, Iraq, Qatar, and the UAE. Approximately one-fifth of the world’s total oil transportation passes through this strait.
As safe-haven demand intensified amid escalating Middle East tensions, international gold and silver prices also rallied. Gold futures prices briefly rose over 2%, while silver futures prices briefly surged more than 3%.