Brent crude reached $117 per barrel in the early hours of March 9, 2026, before most of Europe had awakened. Before the official start of the London trading day, it withdrew. However, the figure had been published, and anyone keeping an eye on the oil markets knew what it meant: a conflict that, only days before, financial analysts had referred to as a “tail risk” had taken center stage in the world economy. From $71 at the beginning of the conflict to $117 in just eight days. The biggest weekly increase in US crude prices since records started in 1983. It’s not a geopolitical tale that develops slowly. A startle.
The physical cause is easy to explain and nearly impossible to exaggerate. Every day, about 20% of the world’s oil and liquefied natural gas trade passes through the Strait of Hormuz, a 126-kilometer waterway sandwiched between Oman and Iran’s southern coast. The passage essentially closed when Iran started threatening and then attacking ships trying to use the strait in retaliation for Israeli and American airstrikes that started in late February.
The top oil producers in the region, Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait, were forced to halt shipments of up to 140 million barrels of oil, or roughly 1.4 days’ worth of global demand, all at once in the eight days after the conflict began. After Iranian drones attacked the Ras Laffan processing facility, Qatar declared force majeure on its LNG exports; Qatar alone provides 20% of the world’s LNG. One of the biggest crude export facilities in the world, Saudi Aramco’s Ras Tanura terminal, closed without an official damage assessment.
| Iran War & Oil Price Crisis — Key Data | |
|---|---|
| Conflict Start | Late February 2026 — U.S. and Israeli airstrikes on Iran |
| Brent Crude at Conflict Start | ~$71/barrel |
| Brent Crude Peak (March 9, 2026) | ~$117/barrel intraday |
| Brent Crude (March 12, 2026) | ~$100/barrel — over a third higher than pre-war |
| WTI One-Week Gain (Early March) | Largest weekly gain on record since 1983 |
| Global Oil/LNG Disrupted | ~20% of world supply — Strait of Hormuz largely closed |
| Strait of Hormuz Length | 126 km — only seaborne exit from the Persian Gulf |
| Asian Share of Hormuz Traffic | ~90% of all Hormuz oil/gas bound for Asia |
| Philippines Crude Dependency | 95% from the Middle East |
| Qatar LNG Force Majeure | Declared after Iranian drone attacks — 20% of global LNG |
| Saudi Aramco Ras Tanura | Closed due to attacks — damage extent undisclosed |
| U.S. Gasoline Average (Early March) | $3.41/gallon — up 14% in one week |
| U.S. Gas Price at April 2026 | ~$4.30/gallon |
| European Gas Prices | Roughly doubled since conflict start |
| Jet Fuel Price Spike | +60% in the opening weeks |
| Nitrogen Fertilizer Risk | Middle East supplies ~50% of global urea and sulphur exports |
| Goldman Sachs Forecast | $100+ if shipping disruptions continue; upside risks through 2026 |
| BMO Warning | $150/barrel could trigger global economic downturn |
| IEA Strategic Reserve Release | 400 million barrels — record release |
| Reference | EIA Short-Term Energy Outlook |
| Historical Parallel | 1973, 1979, 1990 oil shocks — CSIS Analysis |
Technically, the markets had been warned. As risk mounted, Brent had already increased from slightly over $60 to over $70 in the week before the first strike. Analysts took note. Clients were advised by Goldman Sachs to anticipate “temporary disruption” and that oil prices should drop over the course of the year. Crude would be capped at about $80, according to UniCredit.
Following the initial airstrike that killed Iran’s supreme leader, a U.S. fund manager predicted that the economic consequences would be “short-lived.” Geopolitical outbursts like this are not uncommon, as history has repeatedly demonstrated. Three weeks later, the price of oil had surpassed $100, the price of gas in Europe had doubled, and the fund manager’s quote had become one of many reasonable but ultimately incorrect forecasts.
What’s happening in the nations most vulnerable to the disruption is the aspect of this story that receives less attention than the oil price chart. Approximately 90% of the gas and oil that typically cross the Strait of Hormuz is headed for Asia. Approximately 95% of the crude used in the Philippines comes from the Middle East. In an effort to save fuel, its president declared that public employees would work four days a week. Diesel prices in Vietnam increased by 60% in a single month; in certain cities, moped riders formed lines at gas stations that stretched across city blocks, panic-buying before prices increased even more. Similar lines formed in Dhaka.
Singapore, which imports 90% of its food, is keeping a careful eye on freight costs because everything it purchases is transported by ships, which now cost significantly more to operate and insure. In an effort to reduce electricity use, Thailand mandated that public air conditioning be kept at 26°C. The changes are immediate and practical, the kind that appear in day-to-day activities before they appear in economic data.
Agricultural economists are genuinely uneasy about the fertilizer dimension. Natural gas powers the Haber-Bosch process, which creates synthetic nitrogen fertilizer. About half of the world’s exports of urea and sulfur, two essential fertilizer inputs, come from the Gulf. A secondary food price shock is already developing due to the disruption of Gulf LNG production and the region’s nitrogen fertilizer plants are experiencing supply issues. Within days of the conflict’s beginning, BASF, the biggest chemicals company in the world, started raising prices.
Regarding its Teesside plant in northeastern England, Huntsman issued a warning. It will take several months for the cost increases ingrained in March’s supply chain to eventually show up in consumer food prices. The impact of the Iran War on the price of wheat for a family in Tokyo or Lagos is not yet apparent, but most analyses indicate that it will soon.
In the writings of economists who have experienced this previously, there is a recurring historical parallel: 1973, 1979, 1990. Recessions in major economies were always preceded by rising energy prices brought on by the Middle East conflict. “Rising oil and gas prices are harbingers of economic trouble,” said Ian Stewart, chief economist at Deloitte in the United Kingdom. In 2023, Europe’s growth rate collapsed due to the spike in energy prices following Russia’s invasion of Ukraine.
The 1980s tanker war, in which Iran and Iraq both targeted oil shipping in the Gulf and Ronald Reagan sent the biggest naval convoy since World War II to defend merchant ships in the Hormuz corridor, is an even more striking parallel. Washington also suggested using naval escorts in this battle, a detail that seemed more like an old script being read from again than a new strategy to anyone with a sense of history.
The uncertainty surrounding duration is what makes the 2026 scenario especially challenging to model. A brief shock can be priced by markets. A long one can be priced by them. Genuine ambiguity regarding which category the current conflict falls under is what they struggle with. Trump said the war was “won” but added that it might need to go “further.” Iran demanded lasting peace and the removal of all sanctions, rejecting proposals for a temporary ceasefire. As it observes this, the market is torn between two scenarios with drastically different price outcomes.
A brief conflict with a prompt Hormuz reopening results in a sharp decline in prices and a manageable level of damage to the world economy. $150 is no longer an analyst’s worst-case scenario due to a protracted conflict, ongoing infrastructure attacks, and persistent strait disruption. It seems as though the world is genuinely unsure of which version of this story it is living through as it watches everything play out in real time, and the answer is not yet apparent from where things stand.
