Oil prices crossed $110 per barrel on Sunday, and right now markets are trying to make sense of one of the sharpest supply shocks in years. Crude oil futures posted their biggest single-week gain since records started being kept in 1983 — West Texas Intermediate is up 26.5% to $116.62 a barrel, and the Brent crude oil price climbed 23%. The last time oil prices were anywhere near this territory was after Russia’s invasion of Ukraine in 2022, and a lot of analysts are wondering how much further this goes.

Crude Oil Prices Surge As Iran War Disrupts Global Supply

The Strait of Hormuz Factor

The Iran war has effectively sealed the Strait of Hormuz, and that one fact is doing most of the damage to crude oil prices right now. Tankers are refusing to make the transit — around 20% of global oil supply moves through that waterway — and Gulf producers are also running out of storage space for barrels that simply have nowhere to go.

Iraq’s southern oilfields are a good example of how bad things have gotten at the time of writing. Output has fallen 70%, dropping to about 1.3 million barrels per day from 4.3 million bpd before the conflict started, according to three industry officials who spoke to Reuters. Kuwait also announced production and refinery cuts on Saturday, pointing to Iranian threats against ships trying to pass through the Strait. The UAE said it was carefully managing offshore output due to storage constraints, and its onshore operations are continuing as normal.

Also Read: Iran Conflict Halts Tankers, Shell Gasoline Prices Surge Globally

Trump’s Take on the Oil Price Spike

Shortly after crude oil futures broke past $100 on Sunday evening, President Donald Trump took to Truth Social with a response that many have since widely shared. Oil prices, he made clear, are not something keeping him up at night.

President Donald Trump stated on Truth Social:

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!”

The U.S. national average for regular gasoline is also up — about 14% higher between last week and this Saturday alone, per AAA data. The Treasury Department has said plans to help ease energy costs are coming, but the market is still pricing in a prolonged conflict, and oil prices are reflecting that fully.

No Clear Exit From the Oil Prices Crisis

The situation showed no real signs of cooling over the weekend. Reports say Iran named Mojtaba Khamenei — son of Ayatollah Ali Khamenei, who died in the opening days of the war — as its new supreme leader. Energy Secretary Chris Wright said Sunday that traffic through the Strait would only resume once the U.S. has dismantled Iran’s ability to threaten tankers.

Energy Secretary Chris Wright stated:

“Traffic through the Strait will resume after the U.S. has destroyed Iran’s ability to threaten tankers.”

The Brent crude oil price and crude oil prices broadly are expected to stay elevated for as long as the Strait stays closed. Oil prices have become one of the most closely tracked numbers in global markets right now, and a resolution — if and when it comes — depends almost entirely on how fast the military situation moves.