Published by Global Banking & Finance Review®
Posted on March 1, 2026
4 min readLast updated: April 2, 2026
Add as preferred source on GoogleOil prices leapt nearly 9% on escalating Israel–Iran conflict, with Brent hitting $82.37 and WTI reaching $75.33 at intraday highs, as tanker damage and shipping disruptions in the Gulf spurred fears of supply shortages.
By Nicole Jao
NEW YORK, March 2 (Reuters) - Oil and gas prices surged on Monday following Israeli and U.S. strikes on Iran and retaliation by Tehran that forced shutdowns of oil and gas facilities across the region and disrupted shipping in the crucial Strait of Hormuz.
A prolonged conflict in the Middle East could lead to a sustained rise in oil prices, fuelling inflation that could undermine global economic growth and push up U.S. retail gasoline prices as well.
Brent crude futures rose as much as 13% to $82.37 a barrel, highest since January 2025, before settling up $4.87, or 6.7%, at $77.74 a barrel. The contract surged in post-close trading after Iran's Revolutionary Guards late Monday said they would set fire to any ship attempting to transit the Strait of Hormuz.
U.S. West Texas Intermediate crude closed at $71.23, up $4.21, or 6.3%. The benchmark at one point gained more than 12% to $75.33, highest since June.
The initial surge in oil prices was less dramatic than some analysts had predicted, but Iran's retaliatory attacks on other key energy-producing countries like Saudi Arabia and Qatar fanned fears that a longer, protracted back-and-forth would risk additional supply disruptions.
"Key questions are how much supply will be lost, for how long, and how do major powers react?" said Daniel Yergin, vice chairman at S&P Global.
On Monday, Saudi Arabia shut its biggest domestic oil refinery after a drone strike. Qatar halted production of liquefied natural gas and state-owned QatarEnergy was set to declare force majeure on LNG shipments. The widening Iran conflict also left 150 ships stranded at anchor around the Strait of Hormuz after a seafarer was killed and at least three tankers were damaged.
On a typical day, ships carrying crude oil equal to about one-fifth of global demand sail through the Strait of Hormuz along with tankers hauling diesel, gasoline and other fuels to major Asian markets including China and India. The waterway is also the conduit for about 20% of the world’s liquefied natural gas.
JPMorgan said a three- to four-week squeeze on Strait of Hormuz traffic could force Gulf producers to shut output and push Brent above $100.
Kenny Zhu, research analyst at Global X, said the North American energy complex was well positioned to hedge against disruptions should there be any lasting impacts on global energy trade.
The relatively muted response in U.S. natural gas markets versus European and Asian benchmarks illustrates that point. Front-month natural gas futures rose 10.1 cents, or 3.5%, to $2.96 per million British thermal units on Monday.
However, the Dutch front-month contract at the TTF natural gas hub, the benchmark European price, settled up about 40% at 44.51 euros per megawatt hour (MWh) on the Intercontinental Exchange. Asian LNG prices jumped almost 39% on Monday with the S&P Global Energy Japan-Korea-Marker (JKM), widely used as an Asian LNG benchmark, at $15.068 per million British thermal units (mmBtu), Platts data showed.
Global tensions have contributed to a 19% rally in Brent this year, while WTI has gained about 17%, even though the International Energy Agency and other analysts believe the market is well supplied, with extra output from producers such as the United States, Guyana and OPEC+ expected to outpace global demand this year.
OPEC+ agreed on Sunday to raise oil output by 206,000 barrels per day in April. Every OPEC+ producer is essentially producing at capacity except for Saudi Arabia, RBC Capital analyst Helima Croft said.
Globally, visible oil inventories stood at 7.827 million barrels, enough for 74 days of demand, which is near a historical median, Goldman Sachs wrote in a note.
Average U.S. retail gasoline prices crossed $3 a gallon for the first time since November on Monday. Analysts expect the widening conflict to further increase prices in the coming days.
U.S. ultra-low-sulfur diesel futures rose to a two-year high on Monday at $2.90, gaining about 9%, while gasoline futures rose about 4%.
“While we do not know where these disruptions will end or how the conflict will ultimately resolve, the near-term result is likely to be heightened volatility in global energy markets and a potential rerouting of global oil and gas cargoes," said Global X's Zhu.
(Additional reporting by Alex Lawler, Florence Tan, Sudarshan Varadhan, May Angel and Susanna Twidale; Editing by Kevin Liffey and David Gaffen)
Oil prices surged due to escalating conflict between Iran and Israel, which disrupted shipping in the Middle East.
Brent crude futures reached as high as $82.37 a barrel, up $6.47 or 8.88%.
Shipping routes off the Gulf coast in the Middle East were affected.
Yes, at least one seafarer was killed during the incidents.
The escalation heightened uncertainty in the global economy due to risks to oil supply.
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