Anabelle Colaco
04 Mar 2026

NEW YORK CITY, New York: Oil prices have jumped sharply as escalating attacks in the Middle East raised fears of major disruptions to global energy supplies.

U.S. and Israeli strikes on Iran, along with retaliatory attacks targeting Israel and U.S. military installations around the Gulf, unsettled markets and sparked concerns that oil exports from the region could be curtailed.

Traders are betting that supply from Iran and other Middle Eastern producers could slow significantly or even halt. Attacks across the region, including on two vessels moving through the Strait of Hormuz — the narrow entrance to the Persian Gulf — have restricted countries' ability to ship oil abroad. Energy analysts warn that prolonged instability would likely push up crude and gasoline prices.

West Texas Intermediate crude, the U.S. benchmark, rose to US$72.79 a barrel early Monday, up 8.6 percent from about $67 on February 27, according to CME Group data.

Brent crude, the international standard, climbed to $79.41 per barrel, up nine percent from $72.87 on February 27, when it had already reached a seven-month high, according to FactSet.

Higher global energy prices typically translate into more expensive gasoline and higher costs for groceries and other goods, adding pressure at a time when many consumers are still grappling with elevated inflation.

About 15 million barrels of crude per day, roughly 20 percent of global supply, pass through the Strait of Hormuz, making it the world's most critical oil chokepoint, according to Rystad Energy. The strait, bordered to the north by Iran, is a vital transit route for oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.

Iran temporarily closed parts of the strait in mid-February for what it described as military drills, sending oil prices roughly six percent higher in the following days.

Amid the current tensions, eight OPEC+ countries announced they would increase crude production. The Organization of the Petroleum Exporting Countries said it would boost output by 206,000 barrels per day in April, more than analysts had expected. Countries raising production include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman.

"Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper," said Jorge León, Rystad's senior vice president and head of geopolitical analysis, in an email. "If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets."

Iran exports about 1.6 million barrels of oil per day, largely to China. Any disruption to those exports could force China to seek alternative supplies, potentially adding further upward pressure on prices.

However, analysts noted that China maintains substantial strategic reserves and could also increase imports from Russia if needed.