Global oil prices are expected to rise further when markets reopen on Monday as the ongoing conflict involving the United States, Israel and Iran enters its third week, raising concerns over disruptions to vital energy infrastructure and supply routes.
Tensions have intensified following warnings from Donald Trump, who threatened additional strikes on Iran’s key oil export facility on Kharg Island. Iranian authorities responded with strong warnings of further retaliation, deepening fears of a prolonged confrontation that could significantly disrupt global energy markets.
Oil benchmarks such as Brent crude and West Texas Intermediate have already recorded sharp increases, climbing more than 40 per cent so far this month and reaching their highest levels since 2022. The surge follows Iranian actions that halted shipping through the Strait of Hormuz, a strategic passage through which roughly one-fifth of the world’s oil supply normally passes.
Washington has called on several countries, including China, France, Japan, South Korea and United Kingdom, to deploy naval forces to safeguard the crucial maritime corridor.
Military activity in the region escalated further after US forces targeted facilities on Kharg Island on Saturday. Shortly afterwards, Iranian drones reportedly struck an important oil terminal in the United Arab Emirates, raising concerns that critical energy infrastructure across the Gulf could become targets.
Analysts from JPMorgan Chase, led by Natasha Kaneva, described the situation as a significant escalation, noting that energy facilities had largely avoided direct attacks earlier in the conflict.
Several major oil facilities in the Gulf are considered particularly vulnerable, including export terminals in Fujairah, as well as Saudi Arabia’s Ras Tanura and the Abqaiq complex. Despite the tensions, loading operations at Fujairah have reportedly resumed after a brief disruption.
Energy experts estimate that global oil supply could decline by around eight million barrels per day this month as shipping disruptions persist. At the same time, producers in the Middle East have reduced output by roughly 10 million barrels per day, according to the International Energy Agency.
In response to rising prices and supply concerns, the agency has approved the release of about 400 million barrels of oil from emergency stockpiles held by member countries. Japan is expected to begin releasing part of its reserves on Monday.
Diplomatic efforts to de-escalate the crisis remain limited. The Trump administration has reportedly rejected proposals from regional partners to initiate negotiations, while Iran has ruled out any ceasefire unless US and Israeli military operations come to an end. As a result, prospects for a swift resolution to the conflict remain uncertain, leaving global energy markets on edge.
