Oil prices surge past $100 amid Iran war: Revisiting crude’s dramatic journey from minus $40 to triple digits

Oil prices skyrocketed on Monday, jumping 20% to reach levels not seen since July 2022 as the escalating US-Israeli war with Iran triggered supply disruptions and stoked fears of prolonged instability around the Strait of Hormuz, a critical route for global energy shipments.Brent crude futures surged as much as $18.35, or 19.8%, to $111.04 a barrel before easing slightly to $107.93, still up $15.24 or 16.4%, by 0014 GMT on Monday. The US benchmark West Texas Intermediate (WTI) rose $16.50, or 18.2%, to $107.40 per barrel after earlier spiking to $111.24, a gain of 22.4% during the session. Over the past week alone, Brent climbed 27% while WTI jumped 35.6%.Several producers in the region have already begun tightening supplies.

Iraq and Kuwait have reduced oil production, following earlier cuts to liquefied natural gas shipments from Qatar after the conflict blocked exports from the region. Analysts warn that the United Arab Emirates and Saudi Arabia could soon take similar steps as their storage capacities approach limits.Over the past two decades, crude markets have repeatedly witnessed sharp rises and steep falls, driven by wars, sanctions, economic downturns and shifting patterns in global demand.

2022: Russia-Ukraine conflict

Crude futures last climbed above $100 in February 2022, soon after the invasion of Ukraine by oil and gas producer Russia. By March, prices had moved close to the record highs seen in 2008. Brent crude climbed to $139.13 per barrel while the main US contract, West Texas Intermediate (WTI), reached $130.50.Concerns about insufficient global supplies also intensified as Western sanctions were imposed on Russia. At the same time, demand increased as the global economy recovered after the Covid-19 pandemic.

These factors kept prices mostly above $100 until the summer of 2022 before they began to fall back largely because of high supplies.

2020: The ‘take oil off my hands’ era

Just two years before climbing above $100 again, oil markets experienced an unprecedented collapse during the Covid-19 pandemic.Global lockdowns shut offices and factories and grounded aircraft worldwide, causing demand for fuel to plunge. The market was further shaken by scarce storage facilities and a price war between Saudi Arabia and Russia.In April 2020, WTI prices slumped to minus $40.32 per barrel, meaning producers paid buyers to take the oil off their hands. At the same time, Brent crude tumbled to a record low of $15.98.

2012: Sanctions push prices above $100

Oil prices had earlier fallen below $90 during the eurozone economic crisis but rebounded strongly in 2012.The rally followed a series of economic sanctions imposed by Western powers on Iran, including restrictions on crude exports aimed at halting its nuclear programme, a long-standing source of tension between Washington and Tehran.At the same time, wider tensions in the Middle East, particularly the conflict in Syria, helped keep prices almost continuously above $100 until 2014. Prices later slid below $50 at the start of the following year as increased American shale oil production flooded global markets.

2011: Arab spring fuels the rally

Political upheaval across the Middle East and North Africa also rattled oil markets in 2011.Brent crude surged to $127 per barrel in March that year after the Arab Spring uprisings toppled long-standing leaders in Tunisia, Egypt and Yemen. Unrest also spilled across the region, particularly in Libya, a major oil producer, further fueling concerns over potential supply disruptions

2008: The record breaking peak

One of the most dramatic rallies in oil market history took place in 2008 when crude prices reached their highest levels ever recorded.On July 11 that year, Brent crude hit a record high of $147.50 per barrel after crossing the $100 mark earlier in the year for the first time. On the same day, West Texas Intermediate reached its all-time peak at $147.27 per barrel.The surge in prices was fuelled by declining crude inventories in the United States, strong demand from China, and political instability in key oil-producing nations such as Iran and Nigeria. On the top of that, weaker US dollar lent support, as it made dollar-denominated crude cheaper for buyers using other currencies, thereby boosting demand.However, the rally did not last long. As the global financial crisis triggered a severe worldwide recession, demand collapsed and Brent crude plunged to around $36 per barrel by December 2008.