The oil price rose by over 3% on Monday, sending Brent oil above $116 per barrel. West Texas Intermediate (WTI), the US reference price, increased to about $102 per barrel.
The latest increase comes as the US and Israel's war against Iran entered its fifth week with no signs of cessation.
Oil extends its war-driven rise
Several escalating events over the weekend contributed to the rise. President Donald Trump told the Financial Times that he might take control of Kharg Island, the terminal that handles about 90% of Iran's oil exports.
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The U.S. president expressed a mixed view on diplomacy with Iran, stating he was “quite confident” about reaching an agreement with Iran, but admitted that talks could still break down.
At the same time, Iran's parliamentary leader warned that Tehran would “set them on fire” when U.S. forces arrived, promising consequences for U.S. allied countries in the region.
The rise in oil prices is far from over, according to market analysts, who warn that a sustained closure of the Hormuz Strait could send oil prices even higher.
“A scenario where the strait remains closed for another month could lead to an oil price of around $150 per barrel and restrictions on industrial energy consumption,” said Bruce Kasman, global chief economist at JPMorgan, to Reuters.
According to Bloomberg, U.S. officials and Wall Street analysts have also begun discussing the possibility that oil prices could reach $200 per barrel.
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Asian stocks are falling, crypto feels the pressure
The energy shock shook all of Asia. Google Finance data shows that the Nikkei 225 in Japan fell over 4.5%, while South Korea's KOSPI dropped more than 4.3% as import-dependent economies reprice risk.
Volatility has spread to the crypto markets, where asset prices fell early in the morning before rising again.
“The market just crashed — ETH went below $1940 and BTC fell below $65,000,” reported Lookonchain on X.
The oil price above $100 per barrel continues to pressure risk assets by raising inflation expectations and delaying anticipated rate cuts from the Federal Reserve.