TLDR
- Military action by US and Israeli forces against Iran resulted in a practical shutdown of the Strait of Hormuz, blocking tanker movement through a passage responsible for 20% of worldwide oil shipments.
- Brent crude climbed as high as 13%, reaching levels unseen since January 2025, while diesel futures spiked by 20%.
- Saudi Aramco suspended operations at its Ras Tanura facility following a drone attack; explosions occurred in Dubai, Abu Dhabi, and Kuwait City.
- Wood Mackenzie analysts project oil could surpass $100 per barrel if the waterway remains inaccessible; JPMorgan estimates a 25-day blockage could compel Middle East producers to halt output.
- Exxon Mobil and Chevron shares advanced as market participants anticipated elevated crude prices, with both stocks carrying Strong Buy ratings from Wall Street.
Crude oil experienced dramatic gains on Monday following weekend military strikes against Iran by US and Israeli forces, which prompted a near-total halt of tanker movement through the Strait of Hormuz.
Brent crude, the international benchmark, climbed as much as 13%, touching its peak level since January 2025. The commodity traded near $80 per barrel during Monday morning sessions. West Texas Intermediate futures advanced over 7%, reaching approximately $72 per barrel.
The Strait of Hormuz, a confined passage situated along Iran’s coastline, accounts for approximately one-fifth of worldwide petroleum shipments. Maritime operators and commodity traders instituted a voluntary suspension of traffic as military tensions escalated.
During the conflict, Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed. Tehran launched retaliatory attacks targeting Israel and American military installations throughout Saudi Arabia, Qatar, the UAE, Kuwait, and Bahrain.
Saudi Aramco suspended its Ras Tanura refinery operations following a drone attack in the vicinity. Explosions struck Dubai and Abu Dhabi as well. Smoke plumes were observed ascending from the American embassy in Kuwait City, according to reports from Agence France-Presse.
Iranian authorities claimed they shot down an American fighter aircraft that went down in Kuwait. President Trump announced that US military forces destroyed nine Iranian naval vessels and confirmed operations would proceed until achieving all strategic objectives.
Diesel futures experienced gains reaching 20%, mirroring crude oil’s upward trajectory. OPEC+ members agreed during a previously scheduled weekend conference to increase production allocations by 206,000 barrels daily beginning in April.
What Analysts Are Saying
Citigroup’s research team forecasted Brent would trade within an $80-to-$90 band throughout the upcoming week. Morgan Stanley elevated its second-quarter Brent projection to $80 per barrel, increased from the previous $62.50 estimate.
Wood Mackenzie indicated oil could breach the $100 per barrel threshold if Hormuz access remains blocked. JPMorgan’s analysts cautioned that a 25-day closure scenario could compel major producers to completely halt output as storage capacity reaches maximum levels.
Iran produces approximately 3.3 million barrels daily, representing roughly 3% of worldwide supply. The country’s geographic position adjacent to the strait provides it with disproportionate leverage over international energy distribution.
Trump informed the New York Times that the United States intends to maintain its military campaign against Iran for a “four to five weeks” timeframe. He additionally indicated willingness to remove sanctions should new Iranian leadership demonstrate cooperation.
Energy Stocks React
Exxon Mobil shares climbed 2.67% while Chevron advanced 1.41% as market participants shifted capital toward energy equities. Both corporations are positioned to capture advantages from elevated crude pricing, which expands profit margins for petroleum producers.
Exxon disclosed full-year 2025 profits of $28.8 billion, declining from $33.7 billion during 2024. Chevron announced fourth-quarter 2025 adjusted earnings of $1.52 per share, with quarterly revenues approaching $46.9 billion.
Wall Street maintains a Strong Buy consensus rating on both equities. Exxon’s mean price objective stands at $144.63, while Chevron’s target reaches $187.26, accompanied by a 4.5% dividend yield.
Trump conveyed to the New York Times that military operations against Iran would persist, with minimal indications of de-escalation as of Monday morning.
