Brent crude for May delivery climbed 6.68% this Monday to close at $77.74 per barrel on the London Futures Market, amid fears of supply shortages due to the war in Iran and rising tensions in the Middle East. The North Sea crude oil benchmark, Europe's reference, advanced $4.87 on the London Intercontinental Exchange (ICE) compared to last Friday's close, which ended at $72.87. Black gold reacted with a surge, reaching its highest level in eight months since the outbreak of the war that began last Saturday between the United States, Israel, and Iran, which resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei and has escalated with bombings throughout the Middle East region. The bullish sentiment, which had exceeded $80.00 hours earlier, albeit more moderately, prevailed among investors due to fears of supply shortages from the increased tensions in the Middle East and pending the evolution of the conflict in the Persian country, one of the main crude producers in OPEC+ and which controls the Strait of Hormuz, through which nearly 20% of the global maritime oil flow passes. Although there is no official confirmation that the strategic passage is closed, minutes after the market closed, an Iranian Revolutionary Guard general threatened today to 'set fire' to any ship attempting to cross the strait, and since Saturday, many large shipping companies have suspended or diverted their routes. The paralysis of navigation in that area sparked fears of an energy supply disruption, and some analysts predict that, if it were to close completely and for a prolonged period, oil prices could reach up to $100.00 per barrel in the worst-case scenario. In addition to oil, gas prices have also increased by nearly 45% today after Qatar closed the world's largest liquefied natural gas refinery following an attack by Iranian drones, affecting 20% of global production. Professor of Energy and Climate Policy at the University of Oxford, Jan Rosenow, stated this Monday during a virtual conference with the media that the extent of the impact of the Iran conflict on the energy market will depend, above all, on the duration and escalation of the conflict itself. U.S. President Donald Trump today suggested the operation could last 'more than five weeks,' and Rosenow noted that if the war were resolved in a matter of days, the impact would be limited, but if it were to last for weeks, it would end up affecting, among other things, electricity prices and consumers as well.
