Global oil prices surged toward $120 per barrel on Monday, reaching their highest levels since mid-2022, as the escalating conflict involving Iran disrupted Middle Eastern energy supplies and unsettled financial markets worldwide.
The international benchmark Brent crude climbed to as high as $119.50 per barrel, while U.S. benchmark West Texas Intermediate briefly touched $119.48. Both benchmarks were on track for one of their largest single-day gains in recent years.
The sharp rally has been driven by fears of prolonged supply disruptions and concerns about shipments through the Strait of Hormuz, a critical maritime route that carries roughly one-fifth of global oil consumption. Any sustained disruption in this corridor could significantly tighten global supply.
Market analysts say investors are reacting strongly because there is no clear path toward de-escalation in the ongoing conflict. Tony Sycamore, a market analyst at IG Group, said the market’s aggressive reaction reflects rising fears of lasting economic damage if tensions continue to escalate.
The surge in oil prices has also rippled across other commodity markets. Agricultural commodities rallied sharply, particularly biofuel-linked crops. Malaysian palm oil rose about 9 percent, while Chicago soybean oil climbed to its highest level since late 2022. Wheat prices reached their highest level since June 2024, and corn climbed to a ten-month high.
Meanwhile, gold prices fell by more than 2 percent as the US Dollar strengthened. A stronger dollar makes dollar-denominated commodities more expensive for international buyers and has also reduced expectations of near-term interest rate cuts as higher oil prices raise inflation concerns.
Industrial metals also reacted to the geopolitical shock. Aluminum prices surged to a four-year high, with three-month aluminum on the London Metal Exchange rising to $3,544 per ton, the highest level since March 2022.
Regional producers are already warning of potential supply disruptions. Companies such as Qatalum and Aluminum Bahrain have indicated that escalating tensions could affect shipments, with some producers declaring force majeure on deliveries.
The latest developments highlight how geopolitical tensions in the Middle East can quickly ripple through global energy markets and broader commodity prices, raising concerns about inflation and economic stability worldwide.
