Graham cautions Israel on targeting oil sector as prices surge over 25%

Global oil prices surged more than 25 percent on Monday, reaching their highest levels since mid-2022, as the expanding war involving the United States, Israel, and Iran disrupted supply and raised fears about shipping through the Strait of Hormuz. The sharp rise came as political leaders in Washington weighed in on the economic consequences of the conflict and Israel’s targeting choices.

Energy markets have been rattled by the war’s proximity to the Strait of Hormuz, through which roughly one-fifth of the world’s oil supply normally passes. Tanker disruptions and heightened security risks have slowed shipping activity, particularly affecting Asian buyers that rely heavily on Middle Eastern crude.

At the same time, several regional producers have begun cutting output as exports face disruption. Iraq and Kuwait have reduced oil production, while earlier liquefied natural gas reductions from Qatar have also tightened supply. Analysts say the United Arab Emirates and Saudi Arabia may soon be forced to cut production as storage capacity fills.

The price surge has drawn reactions from US political leaders. In a post on Truth Social overnight, President Donald Trump said the increase in oil prices would be temporary and justified by the broader goals of the conflict. “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!” Trump wrote.

Meanwhile, Senator Lindsey Graham cautioned Israel about targeting Iran’s oil sector as part of its campaign. Writing on X, Graham said Israel had shown “amazing capability when it comes to collapsing the murderous regime in Iran” but urged restraint in selecting targets tied to the country’s oil economy. “Our goal is to liberate the Iranian people in a fashion that does not cripple their chance to start a new and better life when this regime collapses. The oil economy of Iran will be essential to that endeavor,” he wrote.

Analysts warn the war could leave consumers facing weeks or months of elevated fuel prices even if the conflict ends soon. Daniel Hynes, senior commodity strategist at ANZ, said additional production disruptions could extend the impact if oil wells are forced to shut down, which would slow the recovery of supply once fighting subsides.