Global benchmark Brent crude futures soared to $87.20 per barrel on Monday morning, while West Texas Intermediate futures in the United States landed on $85.7 per barrel, having initially passed $86. This represents an increase in oil prices of over 3.1 percent globally and over 3.5 percent domestically, as the markets react to Israel declaring war over the weekend in response to an armed incursion from Gaza.
The United States is particularly exposed to the price surge. President Joe Biden drained much of the nation’s Strategic Petroleum Reserve last year in an effort to hold down the price of gas, after the Organization of Petroleum Exporting Countries (OPEC) openly snubbed him and cut production despite his begging them no to do so.
Worse still, in August, the Biden regime delayed plans to restock the reserve, hoping prices would fall.
U.S.-led efforts to embargo or cap the price of Russian oil in order to starve Moscow of revenue, which have proved unsuccessful, have also left America and its allies more exposed to price shocks caused by events in the Middle East. Anti-energy independence policies such as the cancellation of the Keystone XL pipeline and pauses on gas and oil leases, too, have undermined national resilience.
Analysts believe the current spike in prices may just be a “knee-jerk” response to the attack on Israel, and markets can recover – but this could change if Iran is drawn into the conflict, disrupting oil shipments through the Strait of Hormuz.
