Oil futures climbed in early trading on Sunday as the US and Israel’s war with Iran entered its third week, disrupting the global supply chain.
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Brent oil reached $106.33, up nearly $3 from when the market closed on Friday. West Texas Intermediate hit $101.19 on Sunday.
For Americans, surging oil prices mean spending more at the pump. The national average price for gasoline hit $3.69 on Sunday. Gas prices have surpassed $3 in all 50 US states for the first time since 2023.
The International Energy Agency said last week the war has caused the largest oil market disruption in history, and that global oil supply will drop by 8 million barrels per day in March.
Kevin Hassett, the US director of the National Economic Council and a top aide to President Donald Trump, said Sunday on CBS News’ “Face the Nation” that the US is working to minimize the fallout for American consumers.
“The big problem right now would be energy prices, and we’re watching and monitoring closely,” Hassett said.
Much of the instability in the oil market stems from the near-closure of the Strait of Hormuz, which Iran controls and through which about 20% of the world’s petroleum passes. Trump has called on other nations to help secure the strait, but has so far received either lukewarm replies or none at all.
Attacks on major oil hubs are also likely driving up prices. Trump said late Friday that the US had “totally obliterated” military targets on Iran’s Kharg Island, where refineries process almost all of the nation’s oil exports.
The president threatened to target oil infrastructure on the island if Iran continued to prevent ships from passing through the Strait of Hormuz. An attack on the key Iranian oil center would further destabilize the global oil market.
In response, Iran said that ports, docks, and “American hideouts” in the United Arab Emirates could be targeted. Fire later broke out near the Port of Fujairah in the United Arab Emirates, the only multipurpose maritime facility on the UAE’s east coast and a major oil depot, on Saturday. The local government said an intercepted drone caused the fire.
Any end to the conflict, meanwhile, appears to be a long way off. Iran’s foreign minister, Abbas Araghchi, said on Sunday that there has been no discussion of a ceasefire.
“We are only defending our people from this act of aggression,” Araghchi said on “Face the Nation.”We don’t see any reason why we should talk with Americans, because we were talking with them when they decided to attack us, and that was for the second time.”
