Global crude oil prices jumped roughly 4% early Monday following a wave of fresh U.S. military strikes against Iran. The sudden commodity rally reflects a warning from top economist Mohamed El-Erian that the “significant intensification” of hostilities in the Middle East will severely test the market’s prevailing assumption that the conflict will remain contained.
Crude Prices and ETFs Surge
Oil markets reacted swiftly to the renewed geopolitical tensions. Brent crude futures climbed 4.04% to $79.08 per barrel, while West Texas Intermediate (WTI) crude futures increased 4.54% to $74.65 per barrel.
This upward momentum was closely mirrored in oil-tracking exchange-traded funds. The United States Brent Oil Fund (NYSE:BNO) rose 4.27% to $43.95. Simultaneously, the United States Oil Fund (NYSE:USO) saw a 4.27% gain, reaching an overnight price of $113.34.
El-Erian’s Market Consensus Warning
In a weekend assessment, Mohamed El-Erian noted that the “significant intensification of the skirmishes between the U.S. and Iran will test the prevailing market consensus that such developments are unlikely to evolve into a full-scale military conflict.”
El-Erian predicted that if the market consensus holds, oil would open in Asia “higher but not dramatically so—with Brent crude in the high $70s or very low $80s.”
However, he cautioned that if the consensus breaks down, investors should look for oil to “surge into the low-to-mid $80s initially.” Ultimately, he warned that “the situation is becoming increasingly fluid.”
This weekend’s significant intensification of the skirmishes between the US and Iran will test the prevailing market consensus that such developments are unlikely to evolve into a full-scale military conflict.
— Mohamed A. El-Erian (@elerianm) July 12, 2026
If that consensus holds, oil prices will open in Asia in a few hours… pic.twitter.com/JNWJqroxMB
Hormuz Shipping Tensions Escalate
The market movements follow the fourth U.S. strike on Iran within the past week. According to U.S. Central Command (CENTCOM), the latest strikes were a direct response to the Islamic Revolutionary Guard Corps attacking a commercial container ship in the Strait of Hormuz.
CENTCOM stated that the strikes were ordered by the Commander in Chief “to hold Iranian forces accountable” and to degrade their ability to attack “civilian mariners and commercial ships freely transiting the Strait of Hormuz”.
It also reaffirmed on Sunday that the Iranian government did not have control over the Strait of Hormuz, announcing a fresh round of strikes against Tehran as tensions escalate in the region.
— U.S. Central Command (@CENTCOM) July 13, 2026
While Iranian state media claimed the strait was closed, CENTCOM disputed this, maintaining that “traffic is flowing” and the waterway remains open to lawful transit. Roughly one-fifth of global oil supplies typically pass through this critical shipping choke point.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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