AP
New York, Updated: 08:29 AM Mar 02, 2026 IST
Oil prices climbed sharply Monday after US and Israeli strikes on Iran and ensuing retaliatory attacks on Israeli and US military sites around the Gulf disrupted regional energy flows. The tensions followed strikes and the reported killing of Iran’s supreme leader, and triggered protests and security responses in Baghdad and elsewhere.
Traders bet that oil shipments from Iran and other Gulf producers could be slowed or halted. Incidents across the region — including attacks involving two vessels in the Strait of Hormuz, the narrow exit from the Persian Gulf — have made it harder for countries to export crude. Energy analysts warn that prolonged disruption 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 already 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 facing 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 briefly closed parts of the strait in mid-February for what it described as 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 scheduled before the conflict escalated, the Organisation of Petroleum Exporting Countries and its partners agreed to boost output by 206,000 barrels per day in April — a rise larger 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 interruption to those shipments could force buyers to seek alternatives, adding further upward pressure on prices.
