March 1, 2026, 4:25 p.mMarch 1, 2026, 4:25 p.m
The US and Israeli war against Iran and its retaliatory strikes have significantly increased the risks to energy supplies, inflation and growth worldwide. In the event of an escalation, analysts expect oil prices to rise sharply to the range of $100 to $120 per barrel. The consequences could also affect drivers at the gas pumps.
The closure of the Strait of Hormuz, through which hundreds of oil tankers travel every day, could impact global trade. Image: keystone
Oil prices are likely to rise sharply at the start of the week, even though the OPEC+ oil producer alliance decided on Sunday to increase production more than expected. Eight of the cartel’s core countries plan to expand their production by 206,000 barrels per day in April, the organization announced on Sunday. The measure exceeds the previously expected 137,000 barrels, but is considered by experts to be insufficient to compensate for supply disruptions caused by the war.
The situation in the Strait of Hormuz remains crucial. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Around a fifth of the world’s oil and liquid gas trade is carried out via the shipping route, which has been one of the most important in the world since ancient times.
According to the EU, Iran has announced a de facto closure of the strait. According to market analysts, even partial disruptions could effectively take 8 to 10 million barrels of daily supply off the market, driving up prices massively.
Oil market at risk of shock
Even before the war began, oil prices had risen significantly on Friday in view of the rising tensions and had risen by almost 3 percent at the close of trading in the USA. The price for a barrel of North Sea Brent oil rose to $72.48 – the highest level since July.
In the event of a prolonged regional escalation, analysts believe prices of over $120 are possible – a level recently seen in the early phases of the Ukraine war. Logistics and transport risks are currently having a greater impact than production decisions, says Rystad Energy.
OPEC+ is likely to consider further production increases and will meet again on April 5th. However, in fact only Saudi Arabia, the United Arab Emirates and, to a limited extent, Kuwait and Iraq have free capacity – and these exports also depend heavily on safe transit through Hormuz.
There is a risk of inflation and growth effects
According to Commerzbank, a long-term jump in oil prices towards $100 would mathematically increase inflation in the euro area by more than one percentage point and dampen growth by a few tenths. In the short term, however, the consequences could remain limited if the war is as short as previous Middle East conflicts.
In addition to oil, the gas and liquefied gas trade is also affected: around 20 percent of the world’s liquefied gas – mainly from Qatar – passes through the Strait of Hormuz.
Insurers are already increasing war risk premiums for ships by around 50 percent, which is further reducing the effective energy supply, according to a comment from US asset manager Franklin Templeton.
Broader market consequences
A reassessment of geopolitical risks is likely to dominate the financial markets initially: government bonds typically benefit, stocks come under pressure, while gold or the Swiss franc could be sought as a safe haven. Energy, defense, shipping and insurance stocks, on the other hand, are among the potential winners.
According to economists, what remains crucial for further economic development is whether the military escalation spills over into energy and logistics flows. A sustained disruption of key transportation routes in the Gulf would expand the conflict from a regional war to a global energy shock. (hkl/sda/awp/afp)