Oil futures surged upward on Sunday evening as traders price in the first open market session after the start of an escalating conflict in the Middle East that is increasingly threatening energy infrastructure.
Futures on Brent crude (BZ=F), the international pricing benchmark, jumped by 13% to trade above $82 per barrel in the first minutes of open trading, while those on US benchmark West Texas Intermediate (WTI) crude, rose by nearly 10% to cross $70 per barrel.
The price on Brent marks a level not seen since January 2025 as the conflict in Iran has engulfed the entire region, while WTI reached levels not seen since 2025’s “12-day war.”
Gold (GC=F) also picked up more than 2% as investors ran to the precious metal for its flight-to-safety status, while the US dollar (DX-Y.NYB) appreciated by roughly 0.3%. Shares in Saudi Aramco (2223.SR) rose by more than 3% in the Middle Eastern trading session on the prospect for higher oil prices.
Beginning early Saturday morning, the US and Israel have launched a massive barrage of air strikes into Iran in what President Trump has called a bid to destroy the country’s nuclear program and potentially remove the current regime from power. Iranian Supreme Leader Ali Khamenei, who had led Iran for more than 30 years, was killed on Saturday, President Trump said in a Truth Social post.
Iran immediately retaliated against the strikes, launching missiles against US military assets and, increasingly, civilian and energy infrastructure throughout other Gulf states such as Bahrain and the United Arab Emirates, according to news reports from the region.
Crucially for the energy markets, strikes have also hit oil tankers traversing the Strait of Hormuz, a critical global shipping chokepoint that sees roughly a fifth of the world’s oil supply cross through its waters daily. Roughly 15 million barrels per day of crude and condensate cross the Strait every day, according to data from Kpler.
If oil must be diverted, analysts told Yahoo Finance, pipelines in the area — some of them designed in part for scenarios like this — could likely absorb 5 million to 7 million bpd of oil, leaving roughly 8 million or so bpd stranded and cut off from the market.
While Iran, which has significant strategic influence over the chokepoint, has never before fully closed the waterway — a move several analysts told Yahoo Finance would be effectively impossible — any disruption would add significant risk and shipping premiums to oil and gas prices as barrels are diverted.
Several oil majors and major trading houses suspended oil and fuel shipments through the Strait of Hormuz as the US attack began, according to Reuters, and traffic through the Strait has all but frozen, according to satellite imagery from Kpler. Vessels in the area were instructed on Saturday by Iran’s Islamic Revolutionary Guard Corps, the country’s leading military intelligence force, over the radio that “no ship is allowed to pass the Strait of Hormuz,” according to Reuters.
A photograph shows the fishing port of Al Aqir on the Strait of Hormuz in the northern emirate of Ras Al Khaimah on February 25, 2026. (Photo by FADEL SENNA / AFP via Getty Images) ·FADEL SENNA via Getty Images
In the days after the so-called “12-day war” between Israel and Iran in June 2025, “There really wasn’t a physical disruption to flows, and that’s what you saw an increase and then almost an immediate fall back [because] there was no supply disruption,” Ben Cahill, a non-resident fellow at the Arab Gulf States Institute, told Yahoo Finance.
This time, Cahill said, feels different, especially given the attacks already seen on tankers in the Strait of Hormuz. For the oil markets, physical disruption — especially through the Strait — will drive prices over the next days and weeks.
Any sustained disruption to the Strait would also hurt Iran, which exports the vast majority of its seaborne crude shipments through the waterway. But the regime may have assessed the potential economic hit as a necessary pain, analysts told Yahoo Finance.
“Unlike the 12 day war and other flare ups in recent years, the incentives for the Iranians have likely shifted to escalation and not de-escalation, as the regime looks to save face and protect its survival,” Capital analyst Kyle Rodda wrote in emailed commentary.
Pricing pressure will also show up in the insurance market for crude oil tankers. While the war risk premium hasn’t yet triggered blanket policy cancellations in the crude tanker insurance market, a key variable for global oil pricing, insurance analysts who spoke with Yahoo Finance said that prices are jumping steeply and policies are being reworked.
Insurers are now making coverage conditional, placing routing restrictions on contracts and demanding voyage approval, and refusing to give quotes for specific routes and situations. The result, the insurance analysts said, is that owners are “choosing not to transit rather than accept terms that make voyage economics unworkable.”
Rumors in the oil industry had suggested that the bloc might opt to significantly increase its production quotas in an attempt to “mute some upside pressure on prices Monday morning, but only marginally in the face of heightened geopolitical risk,” Rystad Energy head of geopolitical analysis Jorge León told Yahoo Finance.
The move is unlikely to dent the impact of the war premium. Most of the OPEC member countries’ capacity move through the Strait and have now been cut off from the market, according to consultancy Wood Mackenzie. Right now, León said, “markets are more concerned with whether barrels can move than with spare capacity on paper.”
“The key question is when do vessels re-establish export flows,” said Alan Gelder, senior vice president of refining, chemicals and oil markets at Wood Mackenzie. If tanker flow is not “quickly restored,” prices could cross $100 per barrel, according to Wood Mackenzie analysis.
“Given the scale of retaliation, most of the strategic initiative now lies with Iran,” León told Yahoo Finance. “How Tehran chooses to respond over the next 24-72 hours — especially toward energy infrastructure or regional shipping — will be the primary driver of near-term oil market dynamics.”
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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