How the Middle East War Is Driving One of the Fastest Oil Price Spikes in History

The conflict involving Iran, Israel, and the United States is producing one of the fastest oil price increases in modern history, with Brent crude climbing from around $60 a barrel at the start of the year to a peak of $119 before settling near $98 on Thursday. The roughly 63% price rise in a matter of weeks has no close parallel in recent decades, eclipsing even the spikes seen during the Gulf War of 1990 in terms of speed. Analysts warn that if the Strait of Hormuz remains closed for an extended period, prices could climb even further.
The driving factor is a systematic disruption of Middle Eastern energy infrastructure. Iran has struck merchant ships, oil export ports, fuel storage facilities, and tankers across Bahrain, Iraq, and Oman. The Thai-flagged Mayuree Naree was among those struck near the Strait of Hormuz on Thursday. Iraq shut all its oil ports, and Oman evacuated its Mina Al Fahal terminal.
The Strait of Hormuz has been functionally closed since fighting began on February 28, removing approximately 20% of global seaborne oil from the market. Saudi Aramco warned of catastrophic consequences if this continues. Iran’s military compounded concerns by warning publicly of $200 oil, suggesting Tehran views the energy price as a strategic weapon.
The IEA released 400 million barrels of emergency crude in a record coordinated action, and the US pledged 172 million barrels from its Strategic Petroleum Reserve. These measures helped briefly stabilize markets but could not fully offset the scale of physical supply disruption caused by the conflict. Iran has continued striking new targets even as reserves were being released.
Goldman Sachs raised its Q4 2026 Brent forecast to $71 per barrel. Deutsche Bank warned of stagflation risks. Equity markets fell in Asia and European gas prices rose 7.7%, signaling that the conflict’s economic fallout is increasingly global in scope.