Iran’s New Supreme Leader Vows to Maintain Strait of Hormuz Closure as Oil Prices Climb

Global oil production is facing significant disruption as the conflict in the Middle East continues, triggered by U.S. And Israeli actions against Iran. The situation is poised to worsen following a statement from Iran’s new Supreme Leader, Mojtaba Khamenei, ordering the continued closure of the strategically vital Strait of Hormuz, through which approximately 20% of the world’s crude oil and liquefied natural gas passes. Iran has also threatened to target the oil and gas industry in the Middle East should its own energy infrastructure come under attack during the ongoing conflict.

Oil Prices Surge

The price of crude oil immediately reacted to Khamenei’s statement, climbing back above $100 a barrel. Brent crude, the major global oil benchmark, closed at $101 per barrel, while West Texas Intermediate (WTI) traded just below at $96 per barrel . Tehran has warned that prices could potentially reach $200 a barrel, signaling its resolve to utilize its influence on the global economy to halt the war against the United States and Israel.

Global Supply Disruption

The war is causing the “largest supply disruption in the history of the global oil market,” forcing Gulf oil producers to curtail production, according to the International Energy Agency (IEA) . Crude oil production is currently down by at least 8 million barrels per day, with an additional 2 million barrels per day of petroleum products, including condensates, also affected – representing nearly 10% of global demand.

Strategic Oil Reserves Released

In response to the escalating crisis, the U.S. Department of Energy announced the release of 172 million barrels from the Strategic Petroleum Reserve, beginning next week. The IEA has also announced that member countries will release over 400 million barrels of strategic stocks onto the market. Italy will contribute approximately 10 million barrels, representing around 2.5% of the total barrels made available by participating IEA nations.

Russia Benefits from Disruption

Amidst the turmoil, Russia is reportedly benefiting from the situation, collecting up to $150 million per day in additional revenue from oil sales . Moscow has gained an estimated $1.3 to $1.9 billion from taxes on oil exports, as increased demand from India and China, following the de facto closure of the Strait of Hormuz, drives up sales.

Economic Concerns in Europe

Experts warn of potential economic repercussions in Europe. Marcel Fratzscher, president of the German Diw institute, cautioned that a prolonged blockade of the Strait of Hormuz could stifle growth in Germany and the European Union, potentially even leading to a recession. Concerns are rising about stagflation – a combination of high energy prices driving inflation and economic stagnation.

Market Reactions

European stock markets experienced declines on March 13, 2026, with Piazza Affari falling 0.7%, Paris mirroring the decline, and Madrid dropping 1.2%. Frankfurt concluded trading on parity (-0.2%). In the U.S., the Dow Jones and S&P 500 lost 1.52%. The price of gold saw a slight decrease, trading at $5085 per ounce, while the spread between BTPs and German Bunds widened to 78 basis points (+8%).

Background on Mojtaba Khamenei

Mojtaba Khamenei was appointed as Iran’s Supreme Leader on March 8, following the death of his father, Ayatollah Ali Khamenei, in U.S.-Israeli airstrikes. He was reportedly lightly injured in the attack, which also resulted in the deaths of other family members . Khamenei, 56, is considered more hard-line and conservative than his father, though he maintained a low public profile prior to his appointment.