Oil Prices Surge as Strait of Hormuz Closure Sparks Supply Fears

Global oil prices experienced significant volatility and a sharp increase on Tuesday, March 10, 2026, following reports of the closure of the Strait of Hormuz, a critical waterway for global crude oil shipments. West Texas Intermediate (WTI) crude oil surged past $90 per barrel, marking its strongest weekly performance since 1983, driven by escalating Middle East tensions and threats to the vital shipping route.

Strait of Hormuz Closure and Oil Supply Disruption

The closure of the Strait of Hormuz, through which approximately 20% of the world’s oil and liquefied natural gas (LNG) passes , has triggered concerns about a major disruption to global oil supply. On late Monday, an Iranian Revolutionary Guard announced the closure and threatened to fire on any ships attempting passage . This action is reportedly part of Iran’s retaliation against the United States for recent aerial attacks that resulted in the deaths of several Iranian leaders, including Supreme Leader Ayatollah Ali Khamenei .

WTI Price Movements and Market Reaction

WTI futures on NYMEX rose 2.3% to nearly $73.00 in early European trading on Tuesday, March 3, 2026 . However, prices surged further, exceeding $90 per barrel on March 10, 2026, with a weekly gain of 35.63% – the largest since oil futures data collection began in 1983 . Initial market panic on Monday saw Brent crude reach $119.50 and WTI reach $119.48, before calming slightly following a statement from President Donald Trump suggesting the conflict was “almost” over .

US Military Response and Conflicting Signals

The US military has reported destroying command posts of Iran’s Revolutionary Guards (IRG), as well as Iranian air defense and missile launch sites . However, the US executive branch has also sent mixed signals regarding the protection of ships in the region. A statement from the Minister of Energy on X (formerly Twitter) about the US Navy escorting an oil tanker through the strait was later deleted, and the White House denied the information .

Iran’s Stance and Potential for Escalation

Iran has stated that no more oil will leave the Middle East “until further notice” and has declared negotiations “no longer on the agenda” . Qatar’s Energy Minister has indicated that Gulf exporters would halt production if tankers are unable to navigate the Strait of Hormuz , further escalating concerns about global oil supply.

International Response and Potential Mitigation

The International Energy Agency (IEA) convened an “extraordinary meeting” on Tuesday to assess the need to draw on strategic hydrocarbon stocks . Fading expectations of a dovish Federal Reserve (Fed) policy in June, coupled with rising factory-level inflation, could also impact oil demand in the near term .