Oil prices surge to $119 as U.S. naval blockade on Iran disrupts global supply

Global oil prices surged dramatically on Wednesday, with Brent crude briefly topping $119 per barrel—a 7% jump—amid escalating tensions in the Iran conflict, including reports of the U.S. extending its naval blockade on Iranian oil exports. U.S. gasoline prices simultaneously hit their highest levels since the war with Iran began, exacerbating pressures on consumers and economies worldwide. According to Asharq Al-Awsat, former President Trump's rejection of an Iranian offer further fueled the rally, while U.S. Treasury Secretary Scott Bessent stated that Iran's oil industry is now "reeling" under the blockade's weight.

The blockade, part of a broader U.S.-led naval effort, has severely hampered Iran's ability to export oil, contributing to the industry's erosion as described by Bessent in his Wednesday remarks reported by Asharq Al-Awsat. This comes as the conflict, which erupted in late February with U.S. and Israeli strikes on Iranian facilities like the South Pars gas field, has intensified. Iran retaliated by targeting energy infrastructure in Qatar, Saudi Arabia, and Kuwait with missile and drone attacks, including strikes on Riyadh, a Saudi gas facility, and the SAMREF refinery in Yanbu, as detailed in EnergyNow and TTNews reports. Saudi Arabia intercepted several projectiles, but disruptions to oil loadings at Yanbu briefly occurred before resuming.

In the U.S., the American Automobile Association confirmed gas prices reaching peaks not seen since the war's outset, with no peace deal in sight, per Asharq Al-Awsat. This spike reflects broader fears of prolonged supply disruptions, particularly from Iran's effective closure of the Strait of Hormuz, which handles about 20% of global oil and LNG flows. A YouTube analysis highlighted how this has driven Brent from pre-conflict levels around $72 to over $110, with peaks at $119, igniting a global energy emergency.

Financial markets reacted sharply. Gulf stock markets rose in early trading as investors weighed the Iran crisis deadlock, according to Asharq Al-Awsat. Globally, stock indexes tumbled—Japan's down 3.4%, South Korea's 2.7%, Germany's and the UK's 2.6%—while Wall Street saw milder losses, as noted by TTNews. European gas prices soared to three-year highs, and the Brent premium over U.S. West Texas Intermediate widened to an 11-year gap, with WTI settling around $96 after intra-day gains.

Consumers worldwide face mounting costs, with higher fuel prices stoking record inflation and tightening their grip on the global economy. Iran's oil sector bears the brunt, but ripple effects hit importers like the U.S., Europe, and Asia hardest. Gulf producers like Saudi Aramco, despite attacks, have restored some operations, offering slim relief.

What happens next remains uncertain. No peace agreement looms, and further Iranian retaliation or U.S. escalation could lock in high prices for months, potentially knocking out more Gulf production. Energy markets watch closely for any Strait of Hormuz developments or diplomatic breakthroughs, but the blockade's extension signals sustained pressure on Iran.