28/02/2026
Here’s a clear picture of how the ongoing conflict between the United States and Iran — which has escalated into a direct military confrontation — is affecting and could affect global oil prices:
📈 Short-Term Impact: Prices Likely to Surge
Risk Premium & Immediate Spike: Oil markets have already priced in a geopolitical risk premium. Prices jumped to multi-month highs as traders anticipated disruption. Brent crude and WTI rose sharply in reaction to rising tensions even before full-scale conflict erupted.
Open Monday Jump: Analysts expect an initial spike of roughly to around $80 /barrel (up from ~$70–$75 recently) once trading resumes due to fears of supply disruption.
Some estimates suggest prices could jump by $10+ per barrel above recent levels if fears of conflict persist.
🛢️ Key Driver: Supply Disruption Risk
Strait of Hormuz Chokepoint: About 20 million barrels per day — nearly 20% of global oil — flows through the Strait of Hormuz. If Iran retaliates by threatening or partially blocking this route, even for a short period, prices could spike dramatically.
Analysts warn that even temporary interruptions could push crude much higher — in extreme scenarios even toward $100+/barrel if large volumes are shut in.
🌍 Medium-Term Uncertainty
How oil prices behave beyond the first few weeks depends on a few key variables:
Extent of Supply Disruption
Minimal supply disruption: If the Strait stays open and producers continue exports, prices might only see a modest premium (~$3 – $5) and then stabilize or even retreat.
Significant disruption: If Iran blocks shipping or Gulf facilities are attacked, a broader supply shock could develop, driving crude prices sharply higher.
Response of Other Producers
Major producers such as Saudi Arabia and the UAE could increase output to offset disruptions, which would help cushion price spikes.
Duration of Conflict
A quick de-escalation could see prices fall back as the risk premium fades.
A protracted war — especially if attacks target oil infrastructure directly — could sustain high prices for months.
🔁 Secondary Effects
Beyond crude itself:
• Energy markets overall (e.g., LNG) could rise due to nervousness around flows through the Gulf.
• Broader financial markets could become volatile, with oil-linked inflationary pressures affecting interest-rate expectations.
Bottom line: A direct Iran–US war pushes oil prices higher in the short term, largely because markets fear supply disruptions — especially around the Strait of Hormuz. The extent and duration of the spike depend on how the conflict evolves, whether shipping chokepoints are affected, and how quickly other producers can respond.
