Iran War Drives Oil Prices Above $100 as Strait of Hormuz Remains Closed

Oil prices surged past $100 a barrel on Monday, March 9, 2026, for the first time since 2022, as the ongoing conflict between the U.S., Israel and Iran continues to disrupt global energy markets. The crisis has escalated to include attacks on critical infrastructure within Iran and retaliatory actions, raising concerns about sustained supply disruptions and a potential global economic impact.

Escalating Conflict and Oil Supply Concerns

The price of Brent crude, the international benchmark, climbed as high as $119.50 a barrel before settling at $112.98. West Texas Intermediate (WTI), the U.S. Benchmark, peaked at $119.48 before falling back to $110.17. This surge reflects growing anxieties over the stability of oil supplies from the Middle East, a region critical to global energy security.

The conflict has directly impacted energy infrastructure. At least five energy sites in and around Tehran were reportedly struck, and a fire broke out at the Shahran oil depot The Guardian. Kuwait has too announced a precautionary reduction in oil production amid retaliatory attacks from Iran.

Strait of Hormuz Closure Disrupts Global Trade

A major factor driving up oil prices is the effective closure of the Strait of Hormuz, a vital waterway through which approximately 20% of the world’s oil and seaborne gas tankers typically pass The Guardian. The threat of Iranian missile and drone attacks has halted tanker traffic, creating a significant bottleneck in global oil supply.

Iraq, Kuwait, and the United Arab Emirates have reduced oil output due to limited storage capacity resulting from the inability to export crude through the strait CNBC.

Economic Impact and Government Response

The surge in oil prices is cascading through other industries and impacting economies worldwide, particularly in Asia, which heavily relies on Middle Eastern oil imports. Higher energy costs contribute to inflation, straining household budgets and dampening consumer spending.

Stock markets have also reacted negatively. Tokyo’s Nikkei 225 index plunged more than 7% early Monday, and U.S. Stock index futures fell, signaling potential losses for Wall Street The Guardian. On Friday, the S&P 500 dropped 1.3%, and the Dow Jones Industrial Average fell by roughly 450 points.

In the U.S., a gallon of regular gasoline rose to $3.45 on Sunday, an increase of 47 cents from the previous week, while diesel prices climbed to approximately $4.60 a gallon, up 83 cents The Guardian.

The G7 finance ministers are expected to discuss a coordinated release of crude oil from their strategic reserves to mitigate the impact of rising prices CNBC. U.S. Energy Secretary Chris Wright indicated that gas prices could fall back under $3 a gallon “before too long” The Guardian.

Iran’s Oil Exports and Regional Impact

Iran exports roughly 1.6 million barrels of oil per day, primarily to China. Disruption to these exports could further exacerbate supply concerns and drive up prices The Guardian. The price of natural gas has also increased, though not as dramatically as oil, rising to $3.33 per 1,000 cubic feet on Sunday.