TORONTO — Oil prices surged above $115 per barrel on Monday before retreating as Iran named the son of its slain supreme leader as his successor, signalling no end to a war that has severely disrupted global energy supplies and pushed Canadian gas prices sharply higher.
Brent crude climbed above $115 per barrel early Monday before falling back toward $106, according to The Guardian. U.S. West Texas Intermediate followed a similar pattern, settling near $105. Both benchmarks have jumped more than 25 percent since U.S.-Israeli strikes on Iran began on February 28.
Iran's Assembly of Experts named Mojtaba Khamenei, 56, to succeed his father, Ayatollah Ali Khamenei, who was killed in the war's opening strikes, Reuters reported.
New leader seen as more hardline
The younger Khamenei is considered more hardline than his father and has close ties to the Revolutionary Guard, which has been firing missiles and drones at Israel and Gulf Arab states since the war began.
U.S. President Donald Trump called the appointment "unacceptable." Israel warned that any declared successor would be considered a target.
Russian President Vladimir Putin sent congratulations, affirming "solidarity with our Iranian friends" and "unwavering support" for Tehran.
The Strait of Hormuz shipping severely disrupted
Shipping through the Strait of Hormuz, which carries roughly 20 percent of global oil and LNG shipments, has been severely disrupted as Iranian attacks threaten tankers and insurers withdraw coverage.
"There is no precedent for this. The sky is the limit," Neil Atkinson, former head of oil at the International Energy Agency, told CNBC .
Iraq and Kuwait have begun shutting in production as storage tanks fill. Analysts at Societe Generale warned the UAE could follow within five to seven days if disruptions persist.
G7 finance ministers were holding an emergency meeting on Monday to discuss a possible coordinated release of strategic petroleum reserves, The Guardian reported.
Regional infrastructure under attack
Reports indicate Iran has struck energy facilities across the Gulf, though details remain developing:
Bahrain's government said dozens were injured in drone attacks; state media reported a fire at the country's oil refinery, and the state oil company declared force majeure
Saudi Arabia said it intercepted drones targeting its Shaybah oil field
Qatar's LNG liquefaction operations remain shut, with sources saying a restart will take weeks
In Israel, officials said two foreign workers were killed in a missile strike in central Israel on Monday.
Iranian state media reported that at least 940 people have been killed in Iran by U.S. and Israeli strikes. The U.S. military said seven American service members have died.
Canadian gas prices climb sharply
Canadian drivers are paying significantly higher pump prices as global oil costs cascade through domestic markets.
Prices have risen sharply across major cities over the past week, with some locations seeing increases of 25 to 40 cents per litre. Vancouver-area stations reported prices approaching $1.95 per litre on Monday.
Canada exports more crude than it consumes, but domestic pump prices track global benchmarks. Higher oil prices typically support the Canadian dollar and benefit energy-producing provinces, though they squeeze consumer spending elsewhere.
The Canadian dollar traded at 73.05 cents US on Monday, weakening on safe-haven demand for the greenback despite surging crude prices.
Markets plunge on energy fears
Asian markets fell sharply on Monday, according to The National. South Korea's Kospi dropped nearly 6 percent, triggering a circuit breaker for the second time since last week. Japan's Nikkei 225 fell more than 5 percent.
U.S. futures signalled continued losses, with S&P 500 futures down more than 2 percent and Dow futures falling sharply.
Trump said Sunday that a short-term rise in oil prices was acceptable for ending Iran's nuclear threat.
U.S. gasoline prices rose to $3.48 per gallon on Monday, up nearly 50 cents from a week earlier, according to AAA. Diesel hit $4.66 per gallon.
The Bank of Canada faces inflation dilemma
The oil shock complicates the Bank of Canada's policy outlook. Governor Tiff Macklem held rates at 2.25 percent last week, warning that "monetary policy cannot compensate for the structural damage caused by tariffs."
Economists say a prolonged rise in oil prices would lift inflation in Canada, though the effect could be temporary if prices stabilize. The Bank's next rate decision is April 16.
The war enters its eleventh day with no ceasefire in sight. Iranian Foreign Minister Abbas Araghchi rejected calls for a halt, telling NBC News his country must "continue fighting for the sake of our people."
