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Global oil prices surged on Monday after Mojtaba Khamenei was selected as Iran’s new supreme leader, replacing his father, Ali Khamenei.
Crude oil futures jumped more than 30 percent within hours of the announcement, briefly approaching $120 per barrel before settling near $106 in early trading. Prices remained more than 15 percent higher than Friday’s close and marked the first time in four years that oil exceeded the $100-per-barrel threshold.
The price spike followed the death of Ali Khamenei on Feb. 28 during U.S. and Israeli airstrikes on Tehran amid escalating conflict in the region.
Monday’s surge matched price increases seen during the early stages of the Russia-Ukraine war but remained below the record highs of the 2008 financial crisis, when oil reached about $140 per barrel.
The average price of regular gasoline in the United States climbed to $3.48 per gallon as of early Monday, nearly 50 cents higher than the previous week, according to AAA. Diesel prices rose even more sharply, reaching about $4.66 per gallon, an increase of more than 80 cents over the same period.
Analysts warned that the rapid rise in energy prices could ripple through the global economy, raising fuel costs, shipping expenses, and inflationary pressures. Officials in Donald Trump’s administration sought to downplay the risks of the sudden price jump.
Chris Wright said the surge reflected market anxiety rather than an immediate shortage of petroleum supplies.
“The increases are driven largely by market fears,” Wright said, arguing that global production and supply levels remain relatively stable.
President Trump also addressed the price spike, calling the increase a necessary tradeoff given the security concerns surrounding Iran.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!” the president said.
The United States has joined other members of the Group of Seven in discussions about releasing strategic petroleum reserves to help stabilize global energy markets amid ongoing tensions in the Middle East that are affecting supply expectations.
