By Peter Omopo
Oil prices jumped above $100 on Monday as the conflict between Iran and Israel entered its third week, with no signs of a ceasefire, and diplomatic efforts focused on ensuring safe passage for tankers through the Strait of Hormuz.
The surge came after the US president said military forces struck targets on Kharg Island, a key oil export hub in the Gulf. He warned that attacks could extend to energy infrastructure if Iran interfered with transit through the strait, which has effectively been closed since February 28. Iran’s Fars news agency reported no oil infrastructure was damaged in the strikes.
The US leader urged other countries, including China, France, Japan, South Korea, and the United Kingdom, to deploy warships to protect the waterway but provided no formal commitments. Japan and Australia, however, announced they would not send naval ships.
Iran’s Foreign Minister Abbas Araghchi rejected direct talks with Washington, saying his country had no reason to negotiate after the attacks, but he indicated readiness to engage with other nations on safe passage for vessels.
Fighting continued on Monday, with Saudi Arabia intercepting over 60 drones and flights temporarily suspended at Dubai’s airport following a drone-related fire. Araghchi condemned Israeli strikes on Tehran fuel depots, calling them “ecocide” due to long-term health risks.
Brent crude rose about three percent to $106.50 before easing to $104, while West Texas Intermediate climbed over two percent to surpass $100. Japan began releasing oil from strategic reserves after the International Energy Agency announced a coordinated release of 400 million barrels to mitigate price spikes.
Equity markets in Asia reacted with declines in Tokyo, Shanghai, Sydney, Wellington, Taipei, Manila, Mumbai, Bangkok, and Jakarta, while Hong Kong, Seoul, and Singapore recorded gains. European markets opened higher in London, Frankfurt, and Paris.
Analysts warned that the longer the Strait of Hormuz remains impassable, the tighter the commodity supply, which would push prices higher and intensify inflationary pressures. The latest US data showed slower fourth-quarter GDP growth of 0.7 percent and a dip in the Federal Reserve’s preferred inflation gauge to 2.8 percent in January before energy prices rose.
Investors are closely watching policy meetings at major central banks this week, including the Federal Reserve, Bank of England, and European Central Bank, for indications of how the war may affect interest rate and economic policies.
At around 0815 GMT, West Texas Intermediate traded at $100.81 per barrel, Brent at $106.20 per barrel, the Nikkei 225 index was down 0.1 percent at 53,751.15, Hang Seng rose 1.5 percent at 25,834.02, and Shanghai Composite fell 0.3 percent at 4,084.79. London’s FTSE 100 increased 0.4 percent to 10,303.69, the euro was at $1.1424, the pound at $1.3240, the dollar at 159.30 yen, and the euro/pound rate at 86.29 pence. New York’s Dow fell 0.3 percent to 46,558.47 points.
