WTI crude oil closes above $100 for the first time; Brent oil will record the largest monthly gain in history.

As the U.S.-Israel war with Iran enters its fifth week, U.S. President Donald Trump has threatened to destroy Iran’s oil wells, and Brent crude prices are expected to post the largest monthly gain in history.

Brent crude oil futures for May delivery rose 0.13%, to $112.72 per barrel. Brent crude has already surged by about 55% in March, marking the biggest monthly gain since the contract was launched in 1988. The prior record for monthly gains was 46% during the first Gulf War in September 1990.

U.S. West Texas Intermediate (WTI) crude futures for May delivery rose 3.25%, or $3.24, to settle at $102.88 per barrel. U.S. crude for March also rose by about 53%, on track to post its best monthly performance since May 2020. Monday also marked the first time WTI closed above $100 since July 2022.

On Monday, Trump warned Iran that the United States would destroy its oil wells, power plants, and Kharg Island unless the Strait of Hormuz reopens.

On Sunday, President Trump told the media that his preferred option for Iran was to “take the oil,” comparing it to the U.S. actions in Venezuela. In Venezuela, after the arrest of its leader Nicolas Maduro, the United States effectively took control of the country’s oil sector.

He made the above remarks as the conflict between the United States and Israel and Iran had entered its fifth week, with attack incidents spreading across the region, heightening the risks faced by energy infrastructure, and driving a sharp rise in crude oil prices.

The Houthis in Yemen said Saturday that they have launched missiles at Israel, marking the first time they have directly joined the U.S.-Israel war against Iran.

Houthi spokesman Yahya Sarei posted on the X platform that the group fired a series of ballistic missiles at so-called sensitive military targets of Israel to support Iran and Hezbollah in Lebanon.

The attack marks a further escalation of the conflict that began with U.S. and Israeli attacks on Iran on February 28.

Michael Hegge, head of global fixed income and commodities research at Société Générale, said that further disruptions could occur in the Mandeb Strait, a key shipping route connecting the Gulf of Aden and the Red Sea, which could push prices even higher.

Hegge said Monday: “We are talking about 4 million to 5 million barrels of oil a day passing through there.” He added: “Into April, we will see many adjustments, but if, in addition to what we have already lost, the Red Sea loses another 4 million barrels, then this wave of oil price increases will be far, far higher.”

In a report released earlier this month, Société Générale analysts said that long-term supply disruptions in the Middle East could push oil prices to $150 per barrel in April.

The analysts said that the Houthis may try to cut off maritime traffic passing through the Mandeb Strait—which separates the Arabian Peninsula and the Horn of Africa, and ships must go through it to reach the Red Sea and the Suez Canal—thereby increasing pressure on global trade.

Will oil prices stay at high levels for longer?

Ead Yadni, president of the Aden Research company, said that as risks from a prolonged conflict increase, global stock markets have started to reflect a scenario in which “oil prices and interest rates will stay at elevated levels for longer.”

He warned that sustained blockade of the Strait of Hormuz could deepen market pullbacks and increase recession risks, and that uncertainty related to the conflict (including the possibility that the U.S. increases its level of involvement) could keep market volatility at a higher level before oil flows return to normal.

In a report published on Monday, Yadni wrote: “The speed and magnitude of oil price moves highlight how quickly the energy market is repricing geopolitical risks, which poses a challenge to efforts that previously kept the oil and bond markets anchored in place, and it reinforces the risk of continued disruptions to the strait.”

David Roche, a strategist at Quantum Strategies, said that the market is increasingly pricing in the possibility that the United States will adopt a more aggressive response, including potentially “dispatching ground forces” and taking action to seize Iran’s key export hub, Kharg Island, through which about 90% of the country’s oil is exported.

He warned that such moves would effectively choke off Iran’s dollar revenues, but could potentially trigger a comprehensive escalation, and Tehran is likely to retaliate by attacking key infrastructure in the Gulf region.

Such an escalation could spread rapidly to global supply routes. Roche noted that Saudi Arabia’s East-West pipeline system (sending about 5 million barrels of oil per day to the Red Sea) has vulnerabilities, and he warned that any disruption to the choke point of the Mandeb Strait (where the Houthis in Yemen operate) could seriously restrict exports.

He added that even via alternative routes through the Suez Canal, capacity would be reduced significantly, potentially reducing the market’s daily supply by 4 million to 5 million barrels.

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