Oil Prices Soar on Iran Conflict, Threaten Global Economic Recovery

Oil and natural gas prices surged on Monday as Israeli and US strikes on Iran led to shutdowns of oil and gas facilities across the Middle East, disrupting shipping in the Strait of Hormuz.

The conflict has forced Saudi Arabia to shut its biggest domestic oil refinery, with at least three tankers damaged and 150 ships stranded around the Strait. The Dutch front-month contract at the TTF hub rose more than 25% in the morning, a 21% rise from Friday's close.

Brent crude futures rose as much as 13% to $82.37 a barrel before retreating to trade up $5.56 or 7.6% at $78.43 a barrel. U.S. West Texas Intermediate crude climbed to an intraday high of $75.33, up more than 12%, but later pared gains.

Analysts attribute the surge in oil prices to uncertainty around the scale and duration of the conflict. James Hosie of Shore Capital said: 'The latest move reflects uncertainty around the scale and duration of the current conflict and recognises that Iran's political future may have major implications for the stability of the Middle East.'

While some analysts predicted oil would open at more than $90 a barrel, others expect Brent to trade between $80 and $90 a barrel this week amid the ongoing conflict.