Crude oil prices surged by more than 7% on Monday as traders grew increasingly concerned that the conflict between the United States and Iran could spiral out of control, potentially causing major disruptions to global supply.

US crude rose 7.4%, or about $5, to reach $72.02 per barrel by 6:09 a.m. Eastern Time. Global benchmark Brent crude also climbed about 5%, or $5.46, to $78.37 per barrel.

The sharp move followed a broad wave of airstrikes carried out by the United States and Israel against Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei along with several senior officials in the Islamic Republic.

It remains unclear who will lead the fourth-largest oil producer in OPEC. Ultimately, the oil market’s reaction will depend on whether the war results in a prolonged disruption to shipping through the Strait of Hormuz, the world’s most critical chokepoint for seaborne oil trade.

Analysts at UBS, led by Giovanni Staunovo, said in a client note on Sunday: “We view the pace of shipping resumption through Hormuz and the scale of Iran’s response as key factors in determining oil price direction in the coming days.”

US President Donald Trump said Sunday that military operations would continue until all US objectives were achieved. However, Trump also indicated earlier that Iran was willing to negotiate and that he had agreed, leaving the door open to possible de-escalation and avoidance of a long-term supply disruption.

Speaking to The Atlantic on Sunday, Trump said: “They want to talk, and I agreed to talk, so I will hold talks with them.” He also told CNBC that US military operations in Iran were “ahead of schedule.”

Meanwhile, oil tanker traffic through the strait has effectively halted as shipping companies took precautionary measures, according to consultancy Rystad Energy.

Matt Smith, oil analyst at Kpler, said: “Tankers are starting to pile up near the Strait of Hormuz, but nothing appears to be moving right now — there is clear panic among tanker operators.”

According to Kpler data, more than 14 million barrels per day passed through the strait on average in 2025, representing roughly one-third of global seaborne crude exports. About three-quarters of that volume heads to China, India, Japan, and South Korea.

Barclays analysts said in a client note on Saturday that Brent crude could climb to $100 per barrel if the security situation in the Middle East deteriorates further. UBS analysts added that severe disruptions could push spot Brent prices above $120 per barrel.

Amritpal Singh, Barclays analyst, said: “It is highly uncertain how this situation will end, but for now oil markets will have to confront their worst fears. It is difficult to overstate the potential impact on oil markets.”

Andy Lipow, president of Lipow Oil Associates, also warned that Iranian oil exports could collapse amid uncertainty over leadership succession in Tehran, as well as risks of domestic unrest and labor strikes in production areas and oil ports. Iran currently produces around 3.3 million barrels per day.

The British pound fell to its lowest level in two and a half months against the US dollar on Monday, while also slipping slightly against the euro, as investors moved toward safe-haven assets amid escalating tensions with Iran and continued uncertainty over the Bank of England’s monetary policy outlook.

The dollar strengthened on rising safe-haven demand driven by geopolitical tensions, in addition to higher oil prices.

Sterling declined 0.68% to $1.3393, after touching $1.3315 — its lowest level since December 17.

In addition to developments in the Middle East, the pound is also facing domestic political pressure following local elections in northern England that dealt a significant blow to the Labour Party led by Prime Minister Keir Starmer, fueling speculation that the government may shift toward more left-leaning policies and higher public spending.

Barclays analysts said that the growing influence of the moderate left wing within the Labour Party could justify expectations of increased fiscal spending and a higher risk premium on the British pound.

The bank noted that this premium has reached around 2% at the 0.88 level in the euro/sterling cross, with room for further widening in the near term depending on political developments.

The euro rose 0.05% to 87.68 pence against the pound.

George Vessey, Lead FX and Macro Strategist at Convera, said: “At the moment, price action in sterling and UK government bonds reflects caution rather than outright stress. However, with rising political uncertainty and limited policy clarity, sterling’s ability to recover appears constrained until Labour provides a clearer direction.”

Analysts also noted that short-term UK government bond yields near their lowest levels in several years align with broader economic data trends and a shift toward a more accommodative monetary policy stance from the Bank of England, reinforcing expectations for continued weakness in the pound.

The yield on two-year UK government bonds rose 4 basis points to 3.55% on Monday after hitting 3.516% last week — its lowest level since August 2024.

Meanwhile, German two-year bond yields moved higher as inflation-related concerns intensified.

Silver prices climbed in European trading on Monday at the start of the week, extending gains for a second consecutive session and reaching their highest level in five weeks, as strong safe-haven demand for precious metals increased amid growing concerns over the escalating conflict in the Middle East.

The United States and Israel launched wide-ranging strikes on Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, raising the risk of a prolonged military conflict that could have significant repercussions for the global economy.

Price Overview

• Silver prices today: Silver rose 2.8% to $96.42 per ounce, the highest level since January 30, after opening at $93.79 and recording an intraday low of $92.05.

• At Friday’s settlement, silver posted a 6.25% gain, supported by a weaker US dollar against a basket of major currencies.

• During February, silver advanced 10%, marking its tenth consecutive monthly gain and the longest monthly winning streak on record, driven by strong industrial and investment demand for the metal.

The Iran Conflict

The current conflict began with surprise military strikes targeting sensitive sites inside Iran, in what has been described as the most serious escalation in years. The United States and Israel carried out coordinated attacks on strategic Iranian targets, saying they were linked to military and security capabilities — a move widely viewed as a major shift in the trajectory of regional tensions.

Tehran responded by launching waves of missiles targeting US bases and other sites across several Gulf countries, expanding the scope of the confrontation and increasing regional risks.

In a highly sensitive development, Iran’s Supreme Leader Ali Khamenei was reportedly killed on the first day of the strikes — an event that shocked political and security circles both inside and outside Iran and added an unprecedented dimension to the conflict.

Iran declared a state of maximum alert and vowed a broad and painful response, while US and Israeli forces raised their readiness levels in anticipation of further escalation.

Within hours of the strikes, airspace restrictions were imposed in several countries across the region, military movements intensified, and fears grew that the situation could spiral into a wider regional war.

The military operations were accompanied by sharp political messaging, with each side emphasizing its intent to impose new deterrence dynamics, as the international community closely watches developments that could reshape the geopolitical balance in the Middle East.

Gold prices rose by more than 2% in European trading on Monday, extending gains for a fourth consecutive session and reaching the highest level in five weeks, supported by strong demand for the precious metal as a safe haven amid escalating geopolitical tensions and growing fears of a broader global conflict.

The United States and Israel launched wide-scale strikes on Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, significantly increasing the risk of a prolonged military confrontation that could have clear repercussions for the global economy.

Price Overview

• Gold prices today: Gold rose by 2.2% to $5,393.92, the highest level since January 30, up from the opening level at $5,279.21, while the session low was also recorded at $5,279.21.

• At Friday’s settlement, gold gained 1.8%, marking a third consecutive daily advance, supported by weakness in the US dollar.

• The precious metal posted a 7.9% gain in February, marking its seventh consecutive monthly increase and the longest winning streak in two years.

• The latest monthly gain was driven by continued buying from central banks, institutions, and individual investors seeking gold as a preferred alternative investment amid geopolitical and economic uncertainty, in addition to renewed concerns surrounding US assets due to President Trump’s volatile policy direction.

The Iranian Conflict

The current conflict began with sudden military strikes targeting sensitive locations inside Iran, representing the most serious escalation seen in years. The United States and Israel launched coordinated attacks on strategic Iranian targets that they said were linked to military and security capabilities, in what was described as a major shift in the ongoing tensions.

Tehran quickly responded by launching waves of missiles targeting American assets and bases across several Gulf countries, widening the scope of the confrontation and drawing regional actors into the risk zone.

In a highly sensitive development, Iranian Supreme Leader Ali Khamenei was reportedly killed on the first day of the strikes, a development that created a major political and security shock both inside and outside Iran and added an unprecedented dimension to the conflict.

Iran declared a state of maximum alert and vowed a broad and painful response, while US and Israeli forces raised their readiness levels in anticipation of further escalation.

Within the first hours of the strikes, partial airspace closures were announced across several countries in the region, accompanied by heightened military movements and rising fears of a broader regional war.

The military actions were accompanied by strong political messaging, with each side attempting to impose new deterrence equations while the international community closely monitors developments that could reshape the balance of power in the Middle East.

US Interest Rates

• Federal Reserve Governor Christopher Waller said last week that he is open to keeping interest rates unchanged at the March meeting if February labor market data shows that conditions have stabilized after weak performance in 2025.

• According to CME’s FedWatch Tool, markets are pricing a 96% probability of unchanged interest rates in March, while the chance of a 25-basis-point rate cut stands at 4%.

• Investors are closely watching upcoming US economic data and comments from Federal Reserve officials to reassess these expectations.

Gold Outlook

Kyle Rodda, analyst at Capital.com, said that unlike previous escalations in this conflict, there is now a strong incentive for both sides to continue escalating, which could create a volatile and unstable environment for more than just a few days — a scenario that is very supportive for gold.

Independent analyst Ross Norman said gold may be the best indicator reflecting global uncertainty, adding that prices are expected to reach new record highs as the world enters a new phase of geopolitical instability.

Last week, both JPMorgan and Bank of America reiterated projections that gold could rise toward $6,000 per ounce. JPMorgan said it expects sufficient demand from central banks and investors to eventually push prices toward $6,300 per ounce by the end of 2026.

SPDR Gold Trust

Holdings in SPDR Gold Trust — the world’s largest physically backed gold ETF — rose by 3.43 metric tons on Friday, marking the fifth consecutive daily increase, bringing total holdings to 1,101.33 metric tons, the highest level since April 21, 2022.