On March 1, 2026, global oil prices experienced a sharp increase as tensions in the Middle East boiled over following U.S. and Israeli military strikes on Iran. Brent crude, the international benchmark for oil, jumped about 10% to around $80 per barrel in over-the-counter trading on Sunday, according to oil traders and reports from Reuters. This surge came after Brent closed at approximately $73 per barrel on Friday, marking its highest level since July.
The dramatic rise stems from fears that the new conflict could disrupt oil supplies through the Strait of Hormuz, a narrow waterway controlled partly by Iran. This strait is a vital chokepoint for global energy: more than 20% of the world’s oil supply passes through it daily, including exports from major producers like Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates.
After the strikes, Iran warned that the strait was unsafe for ships, prompting many tanker owners, major oil companies, and trading firms to suspend shipments of crude oil, refined fuels, and liquefied natural gas through the route. Trade sources reported that most tanker traffic had halted or rerouted, with vessels anchoring outside the strait. Analysts highlighted this as the primary driver of the price rally.
Ajay Parmar, director of energy and refining at ICIS, emphasized the strait’s importance: “While the military attacks themselves support higher oil prices, the key factor is the closing of the Strait of Hormuz.” He predicted that prices could open much closer to $100 per barrel when formal trading resumes, and possibly exceed that level if disruptions last for a prolonged period.
Other experts echoed similar concerns. Rystad Energy economist Jorge Leon estimated that even with some alternative routes—like Saudi Arabia’s East-West pipeline and Abu Dhabi’s pipeline—the net loss could reach 8 million to 10 million barrels per day if the strait remains blocked. Rystad forecasted a $20 increase, pushing prices to about $92 per barrel at the market open.
Analysts from RBC and Rabobank also weighed in. RBC’s Helima Croft noted warnings from Middle East leaders that a full-scale war on Iran could drive prices above $100 per barrel. Rabobank took a slightly more cautious view, expecting prices to stay above $90 in the short term.
In response to the crisis, the OPEC+ group—which includes major oil producers like Saudi Arabia and Russia—agreed on Sunday to increase output by a modest 206,000 barrels per day starting in April. This small boost represents less than 0.2% of global demand and aims to help stabilize markets. Sources also indicated that Saudi Arabia and the UAE are ramping up exports through alternative means to offset some disruptions.
The conflict has ripple effects beyond the Middle East. Asian countries, including India, are reviewing their oil stockpiles and exploring alternative suppliers, such as Russian oil, to reduce reliance on Middle Eastern shipments.
As markets prepare for the resumption of full futures trading, uncertainty remains high. The extent of any price spike will depend on how long the conflict lasts, whether the Strait of Hormuz reopens quickly, and if further escalations occur. For now, the combination of geopolitical risks and supply fears has pushed oil into a volatile new phase, with potential impacts on gasoline prices, inflation, and the broader global economy.
