Crude Oil Prices Surge More Than 5% After US-Israel Strike on Iran 

Crude oil prices surged more than 5% on Monday March 2, 2025, climbing to their highest level in eight months after unprecedented U.S. and Israeli strikes on Iran sharply escalated Middle East tensions. The developments intensified concerns about potential disruptions to global energy supplies, particularly as the region remains central to world crude exports.  

Markets are closely watching the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of global oil shipments—and significant volumes of natural gas—pass. Any long-term threat to transit flows through the strait would have immediate and far-reaching implications for global supply, keeping a sizable geopolitical risk premium embedded in prices.  

OPEC Members Agree to Increase Production 

At the same time, OPEC+ members agreed over the weekend to a larger-than-expected production increase, a move seen as an effort to stabilize markets in the wake of escalating tensions. However, despite the additional supply, crude remains highly sensitive to geopolitical headlines. Overall, oil prices are likely to stay volatile in the near term, caught between elevated geopolitical risks and underlying concerns about softer demand fundamentals. 

Natural Gas Opens Higher 

Natural gas opened higher on Monday as escalating tensions in the Middle East raised concerns about potential disruptions to global LNG supplies. U.S. export flows remain near record levels, supported by strong overseas demand and tighter global supply conditions. The prospect of supply interruptions from key producing regions has further underpinned LNG markets, providing additional support to natural gas prices at the start of the week.