Global Oil Prices Rise as Iran Conflict Disrupts Global Supply
Global oil prices rose again on Thursday, 12 March 2026, after market participants focused on supply disruptions caused by the escalating Iran conflict. Plans to release large quantities of emergency oil reserves have failed to ease concerns in the global energy market.
According to Bloomberg, benchmark Brent crude oil prices briefly surged 7.9 per cent to $99.24 per barrel. Meanwhile, West Texas Intermediate (WTI) was trading near $94 per barrel.
The price surge occurred because the strategically critical Strait of Hormuz shipping route remains practically closed. This situation has forced several major producers in the Gulf region to significantly cut oil production.
Production cuts from major producers such as Saudi Arabia, Kuwait and Iraq prompted the International Energy Agency (IEA) to take emergency measures. The agency coordinated the release of 400 million barrels from oil reserves.
This volume represents the largest reserve release in history and far exceeds the volume released following Russia’s invasion of Ukraine in 2022.
“I was already worried about this regarding the IEA’s reserve release — it turns out the market simply ignored it and now prices are actually higher,” said Darrell Fletcher, Managing Director of Commodities at Bannockburn Capital Markets.
“It may be sending the wrong signal. What do they know that we don’t?” he added.
The United States itself announced it would release 172 million barrels of oil as part of a global effort to lower energy prices.
For context, current global oil consumption stands at just over 100 million barrels per day. However, Gulf region producers have cut approximately 6 per cent of this supply, and potential production cuts are estimated to increase further.
The near-total closure of the Strait of Hormuz is the primary factor driving the price surge. This route normally carries approximately one-fifth of total global oil supply.
As a result, prices for various energy commodities including crude oil, natural gas and derivatives such as diesel have also risen.
Robert Rennie, Head of Commodities Research at Westpac Banking Corp, believes oil prices are likely to remain elevated in the near term.
“As long as there are no signs of the conflict ending, production shutdowns continue to increase daily and the strait remains practically closed, we believe Brent has potential to move in a new, higher range of around $90 to $110 per barrel through next week,” said Rennie.