Oil and natural gas prices spiked on Monday as simmering geopolitical tensions in the Middle East forced the shutdown of several oil and gas fields.
Both Brent crude and West Texas Intermediate oil surged more than 7% earlier in the day.
Brent hit nearly $82 a barrel, its highest level since January 2025, while WTI breached $75 a barrel for the first time since last June.
Meanwhile, gold prices topped $5,400 per ounce on increasing safe-haven demand, and silver rose above $90 an ounce.
Oil surges on Mideast tensions
Following US-Israeli strikes on Iran this past Saturday, which resulted in the death of Supreme Leader Ayatollah Ali Khamenei and several key officials, crude oil prices surged.
As the markets reopened on Sunday night, the news triggered a scramble among investors to cover short positions and establish long positions, causing prices to gap higher.
Iran has since retaliated, launching missiles across the region and targeting multiple locations, including Israel, Dubai, Bahrain, and Qatar.
Front-month WTI soared 10% in early trade, coming within sight of $75 per barrel. It then pulled back to $72 a barrel and steadied around that level.
“Is this a knee-jerk overreaction to the attack, or a sensible response to the US-Israeli action which puts the whole of the Middle East, and potentially the rest of the world, in danger?” said David Morrison, senior market analyst at Trade Nation.
For global crude oil and natural gas traders, the Strait of Hormuz is a critical choke point, handling approximately 20% of the world’s supply from producers to consumers.
A sustained blockade or disruption of traffic by Iran in this Strait could cause oil prices to rally significantly.
Conversely, if any disruption is quickly resolved, prices could easily reverse, potentially filling the chart gap created on Sunday.
Meanwhile, Brent crude last traded at $78.52 per barrel, up 7.8% from the previous close.
Despite analysts’ weekend predictions that oil prices would open higher—some suggested above $90 a barrel and even near $100—the surge when trading restarted was less significant than anticipated.
“In the event of a prolonged war, the Strait of Hormuz is likely to remain impassable for a longer period of time. The price of Brent crude oil could then rise towards $100 per barrel and remain at this level for some time,” Commerzbank AG’s chief economist, Jörg Krämer, said in a report.
OPEC+’s agreement to raise production by 206,000 barrels per day for April, reached on Sunday, is of minimal significance.
Gold hits one-month high
Gold prices hit a more than one-month high on Monday due to rising safe-haven demand.
Gold briefly reached its highest price since late January in early European trading, as buyers attempted to push momentum past the $5,400 mark.
This attempt has stalled for now, with traders closely monitoring all developments related to the ongoing Middle East tensions.
A key factor was the report that Iran’s Islamic Revolutionary Guard Corps Navy declared the closure of the Strait of Hormuz.
Sticky US inflation data and slowing growth last week lent support to the non-yielding metal. However, a strengthening dollar might limit these gains in the immediate future.
Experts said that there is limited downside for gold prices even if the Middle East tensions ease.
The 2025 surge of 64% provides the foundation for the latest gold rally.
This increase was fueled by several factors, including significant central bank purchases, strong investment flows into exchange-traded funds, and anticipation of an easing of US monetary policy.
Gold prices are projected to rise towards the significant $6,000 mark, a forecast recently reiterated by both JP Morgan and Bank of America.
Specifically, JP Morgan anticipates that sufficient demand from both central banks and investors this year will ultimately drive the price to $6,300 per ounce by the close of 2026.
“Even if tensions stabilise, these structural drivers suggest downside should be limited, with any pullbacks likely to be shallow rather than trend-reversing,” Ewa Manthey, commodities strategist at ING Group, said in a note.
The COMEX gold contract last traded at $5,280.24 per ounce, up 0.8%, while silver was more than 6.5% down at $87 an ounce.
Silver prices gave up strong gains as the dollar surged against a basket of major currencies. A stronger dollar makes commodities priced in the dollar more expensive for overseas buyers.
https://invezz.com/news/2026/03/02/commodity-wrap-oil-spikes-on-mideast-tensions-gold-tops-5400-oz/
