Conflict between the US and Israel with Iran: global oil prices are rising rapidly
3 March 10:23
Oil prices rose for the third consecutive day amid escalating tensions between the US, Israel, and Iran. Concerns about possible disruptions to supplies from the Middle East intensified due to threats to shipping in the Strait of Hormuz.
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What are oil prices?
Brent crude oil futures were trading at $79.44 per barrel, up $1.70, or 2.2%, from previous levels. On Monday, prices rose to $82.37 per barrel, the highest level since January 2025, but some of the gains were lost, and trading ended with a 6.7% increase.
US West Texas Intermediate crude oil rose $1.17, or 1.6%, to $72.40 per barrel. During the previous session, the price reached its highest level since June 2025, then rolled back, but at the end of the day, the contract still added 6.3%.
As market analyst Tony Sycamore noted, with no signs of a quick de-escalation, the Strait of Hormuz remains effectively blocked, and Iran is demonstrating its readiness to strike at the region’s energy infrastructure. Under these conditions, the risks of further oil price increases remain and are only intensifying with each day of the protracted conflict.
Reasons for rising tensions and prices
The US and Israeli air campaign against Iran intensified sharply on Monday. Israel struck Lebanon, while Iran responded with attacks on energy infrastructure in the Persian Gulf countries and strikes on tankers in the Strait of Hormuz.
Amid threats to shipping safety, tankers and container ships began to bypass the Strait of Hormuz after insurance companies canceled coverage for vessels in the region. This led to a sharp rise in global oil and gas transportation tariffs. Tensions escalated further after Iranian media reported that a representative of the Islamic Revolutionary Guard Corps had declared the Strait of Hormuz closed and warned that any vessel attempting to pass through would be fired upon.
The Strait of Hormuz is critical to the global energy market, as it transports about 20% of the world’s oil and gas supplies.
Forecasts and market reaction
Analysts note that markets are increasingly pricing in the risk of further escalation of the conflict in the Middle East. According to ING experts, although restrictions on transit through the Strait of Hormuz are a serious challenge, Iran’s attacks on additional energy infrastructure facilities could pose an even greater threat to the market, threatening prolonged supply disruptions.
Israeli Prime Minister Benjamin Netanyahu said that the US and Israel’s war against Iran could last “some time,” but is unlikely to drag on for years.
Experts expect oil prices to remain high in the near term. Bernstein analysts have raised their forecast for the average price of Brent in 2026 from $65 to $80 per barrel, while noting that in the event of a protracted conflict, prices could rise to $120-150 per barrel.
The increased risks are already affecting the oil products market. Due to the threat to refining capacities in the Middle East, US diesel and gasoline futures have risen to multi-year highs, while European gas oil prices have jumped sharply following disruptions in the region.
It should be noted that a complete blockade of the Strait of Hormuz would allow key Middle Eastern producers to continue oil production for no more than 25 days.
