Oil jumped 25%, with Brent on track for a record one-day gain, while OPEC producers Kuwait and Iraq cut output over the weekend as the crucial Strait of Hormuz remained effectively shut.

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Governments ‌scrambled to limit the impact on economies and consumers from the widening Iran war, ⁠which fuelled a record surge in oil prices on Monday after key producers cut output and Tehran signalled that hardliners would ⁠remain in charge.

In a sign of mounting governmental concern over supply disruptions, the Group of Seven finance ministers will discuss the possibility of a joint release of emergency oil reserves in a meeting on Monday, a French government source said.

In South Korea, which buys 70% of its oil from the Middle East, President Lee Jae Myung ‌said Seoul would cap fuel prices for the first time in nearly 30 years and he warned against panic buying.

Speaking at an emergency meeting, Lee called the crisis "a significant burden on our economy, which is highly dependent on global trade and energy imports from the Middle East."

A senior Japanese member of Parliament ‌on Sunday said the government had instructed a national oil reserve storage site to prepare for a possible crude release, although the country's chief cabinet secretary later saidno decision had been made to release stockpiles.

Japan imports around 95% of its oil from the Middle East. It has reserves to cover 354 days of consumption.

Elsewhere, Vietnam removed import tariffs on fuels and Bangladesh shut universities to conserve electricity and fuel, while China last week ‌asked refiners to halt fuel exports ⁠and try to cancel shipments that were already committed.

US President Donald Trump tried to downplay concerns about rising U.S. gasoline prices, which were up 11% for the week on Friday, while Senate Minority Leader Chuck Schumer called on him to sell oil from the Strategic Petroleum Reserve.

"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," Trump posted on Truth Social on Sunday night. "ONLY FOOLS WOULD THINK DIFFERENTLY!"

Oil jumped 25%, with Brent on track for a record one-day gain, while OPEC producers Kuwait and Iraq cut output over the weekend as the crucial Strait of Hormuz remained effectively shut.

Across Asia, which sources 60% of its oil from the Middle East, equities ⁠slid and the dollar rose as worries grew that the disruption in energy supplies could be prolonged.

Iran on Monday named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, a move that is expected to draw Trump's ire. Weekend attacks on Iranian oil storage facilities fuelled fears of retaliatory strikes on energy facilities.

In Bahrain, Bapco Energies declared force majeure on Monday following an ⁠attack on its refinery complex, the company said.

"Oil prices have now gathered all the ingredients for a perfect storm - Middle East Gulf producers cutting output, the prolonged closure of the Strait of Hormuz ... all compounded by a growing pessimism about a quick turnaround in the current situation," said Kpler senior oil analyst Muyu Xu.

Iraq cut oil production at its main southern oilfields by 70% to 1.3 million ⁠barrels per day, three industry sources said on Sunday, while Kuwait Petroleum Corp began cutting oil output on Saturday and declared force ‌majeure.

No. 2 LNG exporter ‌Qatar has already halted exports of the superchilled fuel and analysts predict that the United Arab Emirates and Saudi Arabia will also have to cut output soon as they run out of oil storage due to the Strait of Hormuz closure.