Oil Surges Above $107 as Bitcoin, Gold Fall Before Fed Decision

Crude oil prices surged on Monday while Bitcoin, gold and other commodities declined as global markets diverged ahead of the Federal Reserve’s interest rate decision on Wednesday.

Brent crude jumped 2.75% to $107.48 a barrel, while West Texas Intermediate (WTI) climbed 2.51% to $102.56. Oil’s gains were driven largely by mounting supply concerns in the Middle East, contrasting with losses across cryptocurrencies and metals.

Saudi Arabia shut its East-West oil pipeline late last week after drone attacks from Iraq damaged the key route. The pipeline allows Saudi crude exports to bypass the Strait of Hormuz, and its disruption could threaten as much as 4% of global oil supply.

Supply risks intensified following additional Houthi attacks on Saudi territory and an assault on a vessel traveling through Hormuz. Yemen’s Houthis also reached Perim island, strengthening their position near the Bab el-Mandeb shipping corridor, which handles roughly 4% to 5% of global oil supplies.

Crude gained about 8% last week and moved above $100 for the first time since July. IG market analyst Tony Sycamore said prices could potentially extend toward the early-March high of $119.48 unless diplomatic efforts produce meaningful progress. Planned talks between Gulf states and Iran in Oman were postponed.

Meanwhile, hotter-than-expected U.S. inflation has strengthened expectations for another Federal Reserve rate hike. Traders now see an 86.3% probability that the Fed raises its target rate to 3.75%-4.00%, compared with 59.4% a week earlier and 33.9% a month ago.

Bitcoin fell toward $76,718 after losing 4.4% over the past week, while Ethereum declined 1.79% to $2,478.43. Total cryptocurrency market capitalization dropped 4.32% to $2.62 trillion over 24 hours.

Precious and industrial metals also weakened. Gold slipped 0.22% to $4,340.58, silver fell 0.25% to $64.11, and copper declined 1.08% to $6.40.

Oil is increasingly being driven by Middle East supply disruptions, while Bitcoin, gold and other risk-sensitive assets remain focused on Fed policy. Wednesday’s rate decision could determine whether this market divergence continues.