Gas Prices Surge as Middle East War Disrupts Global Oil Supply

Crude oil prices jumped more than 40% this month as ongoing conflict between the U.S., Israel and Iran threatens major shipping routes. The Strait of Hormuz remains closed, cutting off a fifth of the world's oil supply and driving prices to their highest levels since 2022.

Crude oil prices continued their steep climb Monday as an escalating conflict involving the United States, Israel and Iran enters its third week, creating the largest disruption to global oil supplies on record.

Brent crude futures rose $2.01, reaching $105.15 per barrel by late Monday, representing a 1.95% increase from Friday’s close, which had already gained $2.68.

West Texas Intermediate crude also climbed $1.61 to $100.32 per barrel, a 1.63% jump following nearly $3 in gains during the previous trading session.

Both oil benchmarks have skyrocketed more than 40% throughout March, hitting their highest prices since 2022. The dramatic surge follows Iranian authorities blocking all shipping traffic through the Strait of Hormuz after coordinated U.S.-Israeli military strikes on Iranian targets.

President Donald Trump has warned of additional attacks targeting Iran’s Kharg Island oil export facility after weekend strikes on military installations, prompting Tehran to promise further retaliation. The Kharg Island terminal processes approximately 90% of Iran’s oil exports.

Iranian drone attacks subsequently struck an important oil terminal in Fujairah within the United Arab Emirates following the Kharg Island strikes. While oil loading has reportedly restarted at Fujairah according to four industry sources, it remains uncertain whether operations have returned to full capacity.

The Fujairah terminal, located outside the Strait of Hormuz, serves as the export point for roughly 1 million barrels daily of the UAE’s primary Murban crude oil grade, equivalent to about 1% of global demand.

“The U.S. is weighing high-risk ground options including raiding nuclear sites for Iran’s enriched uranium, seizing the Kharg Island oil hub, and occupying southern Iran to protect the Strait of Hormuz,” SEB analyst Erik Meyersson said in a note.

“All of these imply significant escalation and require a tolerance for substantially higher risk.”

Trump has called on international partners to send naval vessels to help secure the critical waterway. According to a Wall Street Journal report Sunday, he plans to announce a coalition for escorting ships through the Strait of Hormuz within days.

In response to soaring prices, the International Energy Agency announced Sunday that more than 400 million barrels from strategic oil reserves will enter the market soon, marking a record release designed to counter price increases from the Middle Eastern conflict.

Asian and Oceania reserves will become available immediately, while European and American stockpiles will be released by the end of March, the agency stated.

Despite diplomatic efforts by Middle Eastern allies to initiate peace talks, the Trump administration has rejected these attempts according to three sources with knowledge of the situation. Iran has also dismissed any possibility of a ceasefire until U.S. and Israeli attacks cease, reducing prospects for a rapid resolution.

“As the conflict enters its third week, the lack of a clear denouement has left global markets increasingly worried about an uncontrollable escalatory spiral,” SEB’s Meyersson said.

However, U.S. Energy Secretary Chris Wright expressed optimism Sunday, stating he anticipates the conflict with Iran will conclude within “the next few weeks,” followed by recovering oil supplies and decreasing energy costs.