Oil futures surged in the first trades since the United States and Israel launched strikes against Iran over the weekend.

US crude rose about $5 a barrel, or 8%, to around $72 as futures trading opened Sunday evening. Brent crude, the international benchmark, initially rocketed more than 12% higher to about $82 a barrel but fell just below $80 a few minutes into trading. Brent settled at just over $73 a barrel on Friday.

Meanwhile, stock futures fell. Futures for the S&P 500, the Nasdaq and the Dow were all down about 1%. But futures for Exxon, Chevron and many other oil companies rose about 2% each. Defense stocks, like Northrop Grumman and Lockheed Martin, were up marginally.

The initial oil futures move, though steep compared to typical crude trades, was largely telegraphed and within analysts’ expected range for a rattled but not overly concerned market. Oil prices had already been rising in anticipation of an attack on Iran.

Traders are betting that the current disruption to the oil market because of the strikes will be relatively brief. But significant uncertainty remains about the scope and timeframe for the war, which President Donald Trump suggested could last weeks.

Large-scale unrest, a chaotic power vacuum, strikes that take out oil production, or a prolonged shutdown of a critical oil shipping channel could eventually send oil to $100 a barrel or even higher, industry analysts warn.

If that happens — and the market is currently betting against that scenario — gasoline prices could go through the roof. That could force Americans to pay a price for regime change in Iran, exacerbating affordability concerns.

Here’s what you need know about the oil market as the military conflict ensues.

Iran has major oil reserves

Iran plays a pivotal role in the global oil market. It is a major producer of oil, controls a vital shipping lane for crude and exports to oil-hungry nations such as China. The country also boasts the world’s third-largest proven oil reserves, according to OPEC.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies said early Sunday it would raise its daily output by 206,000 barrels a day after pausing incremental production increases earlier in the year. In the fourth quarter, OPEC boosted production by 137,000 barrels per day.

The production increase may have somewhat blunted the surge in oil prices, but energy analysts didn’t expect the production increases to do much to keep prices in check.

The Strait of Hormuz

The Strait of Hormuz, a narrow waterway off Iran’s southern coast, is the main shipping route for crude from oil-rich countries such as Saudi Arabia and Kuwait to the rest of the world. Iran controls the strait’s northern side. About 20 million barrels of oil, or about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration, which calls the channel a “critical oil chokepoint.”

Iran has threatened to close the vital waterway in previous conflicts with the United States and other Western nations. During Iran’s 12-day conflict with Israel last year, Goldman Sachs estimated that oil prices could blow past $100 a barrel if there was an “extended disruption” to the strait.

Closing the Strait of Hormuz would cause an energy crisis, Bob McNally, president of Rapidan Energy Group, told CNN.

But an even bigger concern would be if Saudi Arabia’s oil production facilities are attacked and knocked offline for a long period of time. McNally notes that the oil plant in Abqaiq, Saudi Arabia, that was attacked in 2019 had specialized equipment that “you can’t just order from General Electric.”

China relies on Iranian oil

Asian economies, including China and India, would be left particularly exposed if the Strait of Hormuz were closed.

Their scramble to secure oil from other countries could send global prices higher. Even a more benign scenario in which only Iranian oil shipments are affected would have knock-on effects globally.

“Since oil is a global, fungible commodity, a disruption anywhere affects prices everywhere,” Clayton Seigle, a senior fellow at the Center for Strategic and International Relations, a Washington, DC-based think tank, wrote in a recent research note.

“A loss of Iranian barrels would cause China to bid for substitute supplies,” Seigle said.

Gas prices expected to rise

Iran is the world’s sixth-largest oil producer, and any military conflict with the country would mean surging oil prices, boosting gasoline prices and overall inflation, according to experts.

Wholesale prices for gasoline futures could rise 25 cents immediately because of the war with Iran, and that could translate to an increase of 5 cents to 10 cents per day for a while, said Tom Kloza, a veteran oil analyst and an advisor to Gulf Oil.

“Clearly, there’s clearly a whiff of panic there. They’re afraid that they’re going to get hit with massive price increases,” Kloza said. “It’s just, where do we stop? Prior to Friday night, I would have said that we would stop at $3.25. Now it’s kind of, it’s a little bit open ended.”

Gas prices across the nation average $2.98, having ticked up slightly from the lowest levels since 2021, after dropping below $3 in December — the first time in four years, according to the American Automobile Association. The Trump administration has repeatedly celebrated falling gas prices, which the conflict in Iran threatens to unravel.

When Israel attacked Iran last June, Brent crude posted its biggest single-day gain since March 2022. The price rose further after the United States became involved in the brief conflict and fell sharply when a ceasefire was announced.

CNN’s David Goldman, Matt Egan and Chris Isidore contributed to this report.