International oil prices surged past $100 per barrel for the first time in three years and eight months, since July 2022 when Russia's invasion of Ukraine began.
West Texas Intermediate crude futures jumped 16% to $105.52 per barrel as of 6:19 p.m. Eastern Time on the 8th (7:19 a.m. Korean time on the 9th), according to Bloomberg. Brent crude traded at $105.85, up 14.27%. Prices spiked as much as 22.4% at the open.
The crude futures market, closed over the weekend, surged as it absorbed multiple shocks simultaneously: production cuts by major Middle Eastern oil producers, airstrikes on petroleum facilities, and the ongoing blockade of the Strait of Hormuz.
Kuwait, OPEC's fifth-largest oil producer, announced on the 7th that it would "preemptively reduce output from crude oil and refining facilities due to Iranian actions threatening vessels passing through the Strait of Hormuz."
Iraq, OPEC's second-largest producer, said it had cut oil production to one-third of normal levels. The United Arab Emirates, the third-largest OPEC producer, also stated on the 7th that it was "carefully managing crude oil production for storage management." Iran's closure of the Strait of Hormuz has left Middle Eastern crude with nowhere to go, piling up in storage facilities. Twenty percent of global oil consumption is exported through the strait.
Veteran oil market analyst Phil Verleger told Bloomberg: "Comparing the first Gulf War, the first week of Russia's invasion of Ukraine, and the current situation, this crisis is the most severe on record. Even small distributors say the current situation is far more concerning than the early stages of the previous two crises."
U.S. stock futures also fell in the upper 1% range.
President Donald Trump responded shortly after the price surge, stating that "oil prices are a very small price to pay for America and the world, safety, and peace." Trump wrote on Truth Social: "After the Iranian nuclear threat is gone, oil prices will drop sharply." He added, "Only fools would think otherwise."
