Finance
Oil gains over 2% as market weighs iran war supply risks
Published by Global Banking & Finance Review®
Posted on March 17, 2026
3 min readLast updated: March 17, 2026
Quick Summary
Oil prices jumped more than 2% on March 17 amid escalating supply concerns centered on the Strait of Hormuz, which has been effectively shut due to the U.S.–Israeli war with Iran; geopolitical risks and disrupted exports are fueling renewed market volatility.
Oil Prices Surge Over 2% as Iran War Disrupts Strait of Hormuz Supply
Strait of Hormuz Disruption Drives Oil Market Volatility
Early Trade Sees Oil Price Rebound
March 17 (Reuters) - Oil prices rose more than 2% in early trade on Tuesday, reversing some of the previous session's losses, on worries about supply with the Strait of Hormuz mostly shut and U.S. allies rebuffing calls to send warships to help tankers move through the vital waterway.
Brent futures jumped $2.48, or 2.5%, to $102.69 a barrel by 0058 GMT, while U.S. West Texas Intermediate crude gained $2.42, or 2.6%, to $95.92.
Previous Session Losses
In the previous session, Brent futures settled 2.8% lower while U.S. West Texas Intermediate (WTI) crude slid 5.3% after some vessels sailed through the critical waterway.
Impact of Strait of Hormuz Closure
Global Energy Supply Concerns
The Strait of Hormuz - a chokepoint for about 20% of the world's oil and liquefied natural gas trade - has been largely disrupted by the U.S.-Israeli war on Iran, now in its third week, raising concerns about supply shortages, higher energy costs and rising inflation.
International Response and Tensions
Several U.S. allies rebuffed Donald Trump's call on Monday to send warships to escort shipping through the Strait of Hormuz, drawing criticism from the U.S. president, who accused Western partners of ingratitude after decades of support.
Analyst Perspective
"The risks remain stark: It only takes one Iranian militia to fire a missile or plant a mine on a passing tanker to reignite the entire situation," IG market analyst Tony Sycamore said in a note.
Diplomatic Efforts and Regional Impact
Iran has asked India to release three tankers seized in February as part of talks seeking the safe passage of Indian-flagged or India-bound vessels out of the Gulf via the Strait of Hormuz, three sources with knowledge of the matter told Reuters.
The effective closure of the strait has forced the United Arab Emirates, the Organization of the Petroleum Exporting Countries' third-largest producer, to shut in production, reducing its output by more than half, two sources told Reuters.
Market and Policy Reactions
Strategic Reserves and Energy Policy
To curb rising energy costs, the head of the International Energy Agency suggested member countries could release more oil, in addition to the 400 million barrels they have already agreed to draw from strategic reserves.
Bank Forecasts and Price Outlook
Some banks raised their longer-term price outlooks, reflecting a potentially prolonged supply disruption. Bank of America lifted its 2026 Brent forecast to $77.50 a barrel from $61, while Standard Chartered raised its projection to $85.50 from $70.
Scenarios for Oil Price Movements
BofA said in a note its updated view reflects two equally likely paths: a quick resolution that restores flows by April and puts Brent near $70, or a longer disruption spilling into the second quarter that lifts prices toward $85.
Ongoing Conflict and Future Outlook
Israel said it has detailed plans for at least three more weeks of war as its military struck sites across Iran overnight.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Sonali Paul)
Key Takeaways
- •Brent rose about 2.5% to ~$102.7 and WTI gained ~2.6% to ~$95.9 as fears mount over supply through the Strait of Hormuz amid conflict with Iran (apnews.com)
- •The IEA calls this the largest oil‑market supply disruption in history; weekly U.S. gas prices surged to a national average of $3.41/gallon (axios.com)
- •OPEC+, China stocks, and IEA strategic releases are being eyed as buffers, while banks like Bank of America have raised long‑term Brent forecasts on fears of prolonged disruption (apnews.com)
References
Frequently Asked Questions about Oil gains over 2% as market weighs Iran war supply risks
1Why did oil prices rise over 2% today?
Oil prices jumped over 2% due to supply concerns following the effective closure of the Strait of Hormuz amid the ongoing U.S.-Israeli war on Iran.
2How has the Strait of Hormuz disruption affected global oil supply?
The disruption has forced major producers like the UAE to reduce output by more than half and raised fears of a prolonged supply shortage.
3What actions are being considered to curb rising energy costs?
The International Energy Agency suggested member countries may release more oil from strategic reserves to address rising costs.
4How are banks reacting to the oil supply risks?
Some banks, like Bank of America and Standard Chartered, have raised their long-term oil price forecasts due to possible continued supply disruptions.
5What role are U.S. allies playing in the Strait of Hormuz crisis?
U.S. allies have rebuffed calls to send warships to the Strait of Hormuz, drawing criticism from the U.S. president for lack of support.