Oil prices have climbed above $80 as escalating US-Iran tensions raise fears of supply disruptions in the Strait of Hormuz, a critical global energy corridor. This type of price jump would push up the cost of fuel for cars and power plants, and the rest of the world, rippling through economies and markets.
Oil prices surged after the US and Israel traded deadly blows with Iran across the Middle East. It has left Wall Street bracing for the economic fallout of an extended regional war. Benchmark US crude futures rose as much as 11% Sunday (March 2, 2026), trading as high as $75 a barrel, before retreating slightly. Brent futures, the global price gauge, jumped 8% to roughly $79 a barrel. Futures tied to the S&P 500 were around 1.4% lower early Monday (March 3, 2026). Changes in stock futures do not always reflect market moves after the opening bell.
Iran’s Revolutionary Guards reportedly said that passage through the Strait of Hormuz was prohibited. About $500bn of energy trade and 20% of global oil supplies pass through the strait each year. Vessels also carry chemicals and fertilisers. Thus, the disruption could also affect global food prices.
“The Iranians understand that the key sensitivity to the US is the price of oil. They’re trying to increase the price,” said Gregory Brew, a senior analyst at the Eurasia Group.
“What they’re trying to do right now is create uncertainty about the safety of the waterway,” added Brew, an Iran specialist. “They want to maintain space up the escalatory ladder. They’re not going 100% immediately.”
“For equities and credit, the impact [of the war] is negative, but only a severe and sustained oil disruption would imply substantial consequences for global growth,” Goldman Sachs analysts wrote on Sunday. “We expect cyclical sectors and oil importers—some of which have had strong starts to the year and may face vulnerability from positioning adjustments will likely see pressure unless a resolution occurs quickly.”
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The killing of Iranian Supreme Leader Ayatollah Ali Khamenei and the deaths of US servicemembers push the conflict into a perilous new phase. Investors and politicians view a forced closure of the strait by Tehran as a scorched-earth tactic that would draw a furious military response.
The recent climb in oil prices suggests some wartime risks have already been priced in. Now, “the key question is when do vessels re-establish export flows,” said Alan Gelder, senior vice president of refining, chemicals and oil markets at energy consultant Wood Mackenzie.
“During that time, oil prices are heavily risked to the upside,” Gelder said. Analysts say a sustained disruption of Qatari natural gas could similarly boost prices for the heating and power-generation fuel.
The worst-case scenario under the circumstances seems to be Americans facing higher prices at the pump during the time leading up to the midterm elections. The economies of Asia and Europe could end up paying even steeper costs of the war in the coming days.