AP
New York, Updated At: 08:29 AM Mar 02, 2026 IST
Supporters of Iraqi Shi’ite armed groups attempt to move toward the US embassy located in Baghdad’s Green Zone, while riot police deploy to block their advance, following the Israel and US strikes on Iran and the killing of Iran’s supreme leader Ayatollah Ali Khamenei, in Baghdad in Iraq on Sunday. Image credit/Reuters
Oil prices jumped sharply Monday after US and Israeli strikes on Iran, and subsequent retaliatory attacks targeting Israel and US military sites around the Gulf, disrupted global energy flows.
Traders wagered that oil shipments from Iran and other Middle Eastern producers could slow or stop. Attacks across the region — including incidents involving two vessels in the Strait of Hormuz, the narrow exit from the Persian Gulf — have hindered nations’ ability to export crude. Energy analysts warn that sustained disruptions would push crude and gasoline prices higher.
West Texas Intermediate, the US benchmark light, sweet crude, rose to about USD 72 a barrel early Monday, up roughly 7.3% from about USD 67 on Friday, according to CME Group data. Brent crude, the international benchmark, traded around USD 78.55 a barrel, up about 7.8% from Friday’s USD 72.87, which had been a seven-month high, per FactSet.
Higher global energy costs would likely translate into more expensive gasoline at the pump and higher prices for groceries and other goods, at a time when many consumers are already coping with elevated inflation.
About 15 million barrels per day — roughly 20% of the world’s oil — transit the Strait of Hormuz, making it the world’s most important oil chokepoint, Rystad Energy says. Tankers passing through carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran. Iran temporarily closed parts of the strait in mid-February for what it called a military drill, a move that had already pushed oil up about 6%.
Against this backdrop, eight OPEC+ members said Sunday they would raise crude production. In a meeting set before the conflict escalated, the Organisation of Petroleum Exporting Countries and partners agreed to boost output by 206,000 barrels per day in April — more than analysts had expected. The producers increasing supply 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,” Jorge Leon, Rystad’s senior vice president and head of geopolitical analysis, said by 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 a day, mostly to China; any disruption to those shipments could force buyers to seek alternatives, adding further upward pressure on prices.
