By Shadia Nasrallah
LONDON, March 9 (Reuters) – Oil prices rose above $119 a barrel on Monday, hitting levels not seen since mid-2022, as several major producers cut supplies and fears of prolonged supply disruptions due to the escalating U.S.-Israeli war with Iran weighed on the market.
Brent crude futures were up $13.02, or 14%, at $105.71 a barrel by 0917 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up $12.16, or 13%, at $103.06.
In the whiplash session, Brent had earlier hit a high of $119.50 a barrel, marking its biggest one-day absolute price increase, and WTI hit $119.48 a barrel. Before Monday’s surge, Brent had already risen 28% and WTI 36% over the past week.
The Strait of Hormuz, through which about one-fifth of the world’s oil and liquid natural gas flows, is virtually closed. Also boosting prices is the election of Mojtaba Khamenei to succeed his father, Ali Khamenei, as Iran’s supreme leader, marking a week in which hardliners remain firmly in power in Tehran amid a conflict with the United States and Israel.
The conflict could leave consumers and businesses around the world facing weeks or months of higher oil prices even if the conflict that began in February is over. 28, ends quickly, as suppliers face high risks of damaged facilities, disrupted logistics and shipping.
U.S. gasoline contracts rose sharply to around $3.22 a gallon through 2022, as U.S. President Donald Trump told U.S. consumers the impact on their cost of living would be limited ahead of midterm elections in November.
Governments can release strategic oil reserves to combat supply disruptions. US Senate Democratic Leader Chuck Schumer has urged Trump to take such a step, and a French government source said on Monday that the Group of Seven would also discuss it.
Iraq’s oil production has fallen by 70% from the country’s main southern oil reserves, sources said, with crude stockpiles reaching their highest capacity.
Kuwait Petroleum Corporation began cutting oil production on Saturday and announced a force majeure on shipments, although it did not say how much production it would cut.
Analysts expect OPEC heavyweights the United Arab Emirates and Saudi Arabia to also cut production soon as they run down oil reserves.
Saudi Aramco has offered more than 4 million barrels of Saudi crude oil in a rare bid, stalled by export routes.
In gas markets, major liquefied natural gas exporter Qatar had already halted production following attacks on key infrastructure.
Oil prices
