TLDR
- Military strikes involving the US and Israel against Iran caused a near-complete shutdown of the Strait of Hormuz, blocking a waterway responsible for 20% of worldwide oil transport.
- Global benchmark Brent crude climbed as high as 13%, reaching levels not seen since January 2025, with diesel futures jumping by as much as 20%.
- Operations at Saudi Aramco’s Ras Tanura refinery were suspended following a drone attack; detonations were also recorded in Dubai, Abu Dhabi, and Kuwait City.
- Wood Mackenzie experts suggest crude prices could breach $100 per barrel if the passage remains shut; JPMorgan indicates a 25-day blockage might compel Middle Eastern producers to halt production.
- Shares of energy giants Exxon Mobil and Chevron advanced as market participants anticipated elevated oil valuations, with both stocks carrying Strong Buy recommendations from Wall Street.
Crude oil markets experienced dramatic upward movement on Monday following weekend military operations by US and Israeli forces against Iran, which precipitated an effective halt to tanker movement through the Strait of Hormuz.
Brent crude, the international pricing benchmark, climbed as much as 13% to reach its strongest position since January 2025. By Monday morning, it was changing hands near $80 per barrel. West Texas Intermediate crude futures advanced over 7%, pushing toward $72 per barrel.
The Strait of Hormuz, a critical chokepoint situated along Iran’s coastline, facilitates approximately 20% of global petroleum shipments. Maritime operators and commercial traders voluntarily suspended passage through the area as tensions escalated.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, was reported killed during the military engagement. In response, Tehran launched retaliatory strikes targeting Israel and American military installations throughout Saudi Arabia, Qatar, the UAE, Kuwait, and Bahrain.
Saudi Aramco suspended activities at its Ras Tanura processing facility following a drone attack in the vicinity. Blasts were additionally documented in Dubai and Abu Dhabi. According to Agence France-Presse, smoke plumes were observed ascending from the US embassy compound in Kuwait City.
Iranian officials claimed responsibility for downing an American fighter aircraft that went down in Kuwait. President Trump announced that US military forces destroyed nine Iranian naval vessels and stated operations would persist until all strategic goals were accomplished.
Diesel futures experienced gains of up to 20%, tracking the crude oil rally. OPEC+ members agreed during a previously scheduled weekend gathering to increase production allocations by 206,000 barrels daily starting in April.
What Analysts Are Saying
Citigroup analysts forecasted Brent trading within an $80-to-$90 band throughout the upcoming week. Morgan Stanley elevated its second-quarter Brent projection to $80 per barrel from an earlier estimate of $62.50.
Wood Mackenzie indicated that crude could surpass $100 per barrel should the Hormuz passage remain inaccessible. JPMorgan analysts cautioned that a 25-day blockade might compel major petroleum producers to completely suspend extraction activities as storage capacity reaches maximum levels.
Iran produces approximately 3.3 million barrels daily, representing roughly 3% of worldwide supply. Its strategic positioning adjacent to the strait grants it disproportionate leverage over international energy logistics.
Trump informed the New York Times that the United States intends to maintain its military campaign against Iran for “four to five weeks.” He additionally indicated willingness to remove sanctions should new Iranian leadership demonstrate cooperation.
Energy Stocks React
Exxon Mobil shares advanced 2.67% while Chevron gained 1.41% as market participants rotated into energy sector equities. Both corporations are positioned to profit from elevated crude valuations, which enhance profit margins for petroleum extraction companies.
Exxon disclosed full-year 2025 profits of $28.8 billion, representing a decline from $33.7 billion during 2024. Chevron announced fourth-quarter 2025 adjusted earnings of $1.52 per share, accompanied by quarterly revenues approaching $46.9 billion.
Wall Street maintains a Strong Buy consensus rating on both securities. Exxon’s mean price target sits at $144.63, whereas Chevron’s consensus target reaches $187.26, featuring a dividend yield of 4.5%.
Trump communicated to the New York Times that military operations against Iran would persist, with no imminent indication of de-escalation as of Monday morning.
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