Brent crude Jumps to 19-month high on escalating Iran conflict

Global oil prices climbed for a third straight session as the widening U.S.-Israeli conflict with Iran disrupted shipments through the Strait of Hormuz, pushing Brent crude to its highest level in 19 months and raising fears of prolonged supply shocks.

Oil markets extended their rally on Tuesday, with Brent crude surging to a 19-month high amid escalating tensions between the United States, Israel and Iran that have rattled energy supply routes across the Middle East.

Brent futures rose about 7% to $83.44 a barrel by early afternoon trade, after touching $85.12 — the highest level since July 2024. U.S. benchmark West Texas Intermediate climbed roughly 7% to $76.26 a barrel, after hitting $77.58, its strongest level since June. Since the conflict intensified over the weekend, both benchmarks have gained around 16–17%.

Strait of Hormuz in focus

The rally comes as the air conflict widens across the region, heightening fears of disruptions to oil and gas flows through the Strait of Hormuz, a critical chokepoint through which nearly one-fifth of the world’s oil and liquefied natural gas passes.

Shipping activity has been severely affected, with tankers and container vessels avoiding the route after insurers reportedly withdrew coverage for ships transiting the waterway. Iranian state media cited a senior Revolutionary Guards official as saying the strait was closed, warning of possible action against vessels attempting passage.

Analysts warn that while concerns over Hormuz are significant, broader targeting of regional infrastructure could pose a deeper and more prolonged risk to supply.

Infrastructure shutdowns ripple across region

Energy infrastructure across the Middle East has faced mounting disruption. Authorities in the United Arab Emirates reported dealing with a major fire at Fujairah port, a key oil export hub. Iraq’s Kirkuk crude loadings at Turkey’s Ceyhan port were halted, according to shipping sources.

Elsewhere, Qatar suspended liquefied natural gas production, Israel halted output at certain gas fields, and Saudi Arabia reportedly shut its largest refinery. Output in Iraqi Kurdistan has also slowed dramatically.

These shutdowns have triggered a parallel surge in refined products and gas markets. U.S. ultra-low sulfur diesel futures jumped 15% to $3.32 a gallon, reaching a two-year high. Gasoline futures rose 6% to $2.50 a gallon, while European gasoil futures climbed 16% to over $1,000 per metric ton. Benchmark Dutch and British gas contracts, as well as Asian LNG prices, also spiked sharply.

Price outlook: $120 possible in extreme case

Market analysts expect crude prices to remain volatile and elevated in the coming days as traders assess the risk of prolonged supply outages. Investment research firm Bernstein raised its 2026 Brent price assumption to $80 per barrel from $65 but noted that in an extreme escalation scenario, prices could surge to $120–$150 per barrel.

The scale and duration of the conflict will likely determine whether the current rally becomes a sustained super-spike or stabilises once supply routes reopen.

For now, energy markets remain on edge, with investors closely monitoring developments in the Gulf and the potential economic ripple effects of sustained high oil prices.