Oil prices surged above $115 a barrel on Monday as United States President Donald Trump told the Financial Times he wants to seize Iran’s primary export hub, the Houthis formally entered the conflict with missile strikes on Israel, and Iranian forces attacked civilian infrastructure in Kuwait, deepening the worst energy supply shock in the history of global oil markets.
International benchmark Brent crude futures climbed 2.4 percent to $115.27 per barrel during early European hours, while US West Texas Intermediate futures rose 1.3 percent to $100.89. Brent has now soared more than 55 percent in March alone, putting the benchmark on course for its steepest monthly rise on record.
The morning’s price surge was driven by two overnight developments. Yemen’s Houthi armed forces announced their formal entry into the conflict on Saturday, saying they had launched a barrage of ballistic missiles at what they described as sensitive Israeli military targets in support of Iran and Hezbollah forces in Lebanon. Simultaneously, Trump’s most direct comments yet on Iran’s energy infrastructure rattled markets. In a Sunday interview with the Financial Times, Trump said his preferred course of action would be to seize Iran’s oil and was considering capturing Kharg Island, the export hub responsible for more than 90 percent of Iran’s crude shipments. “To be honest with you, my favourite thing is to take the oil in Iran,” Trump said. “Maybe we take Kharg Island, maybe we don’t. We have a lot of options. It would also mean we had to be there for a while.”
The remarks came as Iran struck a service building at a power generation and water desalination plant in Kuwait on Sunday evening, killing one worker. A suspected US-Israeli strike also hit the Tabriz Petrochemical Company in northwestern Iran on Monday, sending a large column of smoke over the facility, though Iranian authorities said the fire was brought under control with no toxic substances released.
Rystad Energy chief oil analyst Paola Rodriguez-Masiu said the global system has shifted from “buffered to fragile,” with weeks of supply losses and inventory drawdowns leaving little room to absorb further shocks. “For nearly four weeks, markets showed remarkable resilience supported by a combination of pre-war surplus, crude-on-water, and policy barrels that provided a temporary buffer. That phase is now ending,” she said.
Market analysts warn the coming weeks are the decisive window. Geopolitical strategist Marko Papic of BCA Research estimates the world has already lost 4.5 to 5 million barrels per day of oil due to the war, amounting to roughly 5 percent of global supply, but projects that figure will double by mid-April as strategic petroleum reserves, Russian oil and exempted Iranian supply run dry simultaneously.
According to the International Energy Agency (IEA), the closure of the Strait of Hormuz represents the biggest oil supply shock in the history of global markets, with as many as 20 million barrels per day of oil and fuel flows disrupted. Most of the seven Gulf states that depend on the strait for crude exports, including Saudi Arabia, Iraq, the United Arab Emirates and Kuwait, have substantially reduced production as storage capacity reaches its limits.
Despite the escalating rhetoric, ceasefire channels remain open. Trump told reporters aboard Air Force One that Iran has agreed to most of the 15 points in a US peace proposal conveyed through Pakistani intermediaries, and that Tehran had agreed to allow 20 oil tankers to transit the Strait of Hormuz starting Monday as a gesture of good faith. Several hundred US Special Operations forces have arrived in the Middle East in addition to the 2,500 Marines and 2,500 sailors deployed aboard the USS Tripoli, bringing total US military personnel in the region to over 50,000.
Governments across the world are scrambling to respond to the energy shock. Australia announced free public transport across two states in April to ease the burden of soaring fuel costs, with Prime Minister Anthony Albanese convening state and territory leaders to discuss nationwide measures including possible fuel rationing and tax cuts.
