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Crude oil finally did what analysts have been warning about in the past week: it blew past $100 per barrel on Sunday as Iran continues its closure of the critical Strait of Hormuz. It was the first time crude crossed the $100 mark since Russia invaded Ukraine in 2022. By early Monday, West Texas Intermediate was off highs but still up 12% at $102 a barrel. Global benchmark Brent was trading around 15% higher at $106.
Markets reacted swiftly, with Dow futures currently down almost 900 points. Meanwhile, S&P 500 futures and Nasdaq 100 futures are around 1.6% and 1.7% lower, respectively, although off earlier lows. Asia markets also sank Monday, but pared losses slightly after reports that Saudi Arabia was offering to release crude oil onto the market.
As oil prices started spiking, U.S. President Donald Trump said on Truth Social that “short term oil prices” were “a very small price to pay”. Whether the spike proves temporary remains uncertain as the war shows few signs of easing. Iran named Ayatollah Ali Khamenei’s son, Mojtaba, its new supreme leader, according to reports. On Monday, the U.S. embassy in Riyadh also issued its first departure order for non-emergency government employees to leave Saudi Arabia.
