Global Oil Prices Declining Gradually Despite Geopolitical Risks
Global oil prices have moved erratically over recent days following Middle East conflict, which triggered sharp spikes subsequently followed by significant corrections.
Geopolitical tensions briefly propelled global energy prices upward due to concerns about supply disruptions, before eventually subsiding as markets began assessing distribution risks as less severe than initially feared.
This sharp volatility reflects the sensitivity of global energy markets to developments in a region that has long served as the centre of world oil production and distribution.
In its latest outlook report, the US Energy Information Administration (EIA) noted that Brent crude closed at $94 per barrel on 9 March 2026.
This figure represents an increase of approximately 50 per cent compared to the beginning of the year and represents the highest level since September 2023.
The price surge occurred as oil shipments through the Strait of Hormuz declined and portions of Middle Eastern oil production halted.
According to Al Jazeera, oil prices surged by as much as 50 per cent since the conflict escalated. This increase reflects heightened geopolitical risk premiums that market participants factor into pricing decisions.
In its modelling, the EIA assumes that an effective closure of the Strait of Hormuz would cause Middle Eastern oil production to fall further in coming weeks.
However, the halted production is expected to gradually recover as energy transit through the channel normalises.
After experiencing sharp spikes, oil prices began to correct when markets assessed the risk of distribution disruptions as less severe than previously feared.
According to Al Jazeera’s report, oil prices have remained approximately 17 per cent higher than before the conflict escalation, but have fallen from their peak levels.
This movement reflects a partial reduction in geopolitical risk premiums embedded in oil prices. Market participants have begun adjusting their expectations regarding the likelihood of global supply disruptions.