Brent crude oil futures jumped 13% to around $105 per barrel on Monday, after earlier soaring as much as 29%, amid production cuts by key Middle Eastern producers following disruptions in the Strait of Hormuz. With tanker traffic severely constrained and exports backing up, several major producers have moved to curb output as storage capacity nears its limits. Saudi Arabia has reportedly begun cutting production, joining the United Arab Emirates, Kuwait, and Iraq in scaling back supply.
The disruption has heightened fears of a global energy shortfall and renewed inflationary pressures. Prices briefly neared $120 per barrel before pulling back, as Group of Seven economies weighed the release of emergency oil reserves to stabilize markets. In a separate development, Iran has appointed the son of the late Ayatollah Ali Khamenei as its new Supreme Leader.
