Global Oil Prices Set to Rise Sharply Following US-Israel Strikes on Iran
Global oil markets are expected to experience price fluctuations next week due to the impact of US and Israeli strikes on Iran affecting Middle Eastern oil supplies.
Pre-conflict scenarios suggest rapid price spikes will subside if the strikes do not affect oil shipments and infrastructure, such as Iran’s oil pipelines and the Kharg Island terminal. However, larger price increases and longer-lasting impacts are anticipated if oil infrastructure or supply routes are disrupted, particularly through the Strait of Hormuz, where tanker traffic could be affected.
The Islamic Revolutionary Guards Corps (IRGC) has been deployed to close the Strait of Hormuz amid escalating tensions in the Middle East, according to IRGC Brigadier General Ibrahim Jabari on Saturday, 28 February 2026. “The Strait of Hormuz is currently being closed by IRGC forces in response to aggression against Iran,” Jabari told broadcaster Al-Mayadeen.
Oil prices have already risen due to war concerns. The international benchmark Brent crude closed at a seven-month high of $72.87 on Friday.
Iran exports approximately 1.6 million barrels of oil daily, primarily to China, where private refineries are less concerned about US sanctions that prevent Iran from selling oil elsewhere. If this supply is disrupted, Chinese buyers will seek oil from other global markets, potentially driving further price increases.
The situation in the Strait of Hormuz is another critical concern, as it handles 20% of global oil supply daily. Middle Eastern exporters—Saudi Arabia, Iraq, and the United Arab Emirates—send the majority of their exports through this strait. However, analysts note that Iran has no incentive to attempt closing the strait, as this would cut off its own exports and harm its only major customer, China.
Limited strikes targeting Iran’s nuclear programme and Revolutionary Guards whilst avoiding regime change or total war could cause oil prices to spike by $5–$10 based solely on market fear, according to Rystad Energy’s pre-conflict scenario.
Wider conflict involving tanker traffic disruptions through the strait could push crude oil prices above $90 per barrel and US petrol prices “well above” $3 per gallon, according to another pre-conflict scenario from Clayton Seigle at the Center for Strategic and International Studies. US average petrol prices stood at $2.98 per gallon last week, according to the American Automobile Association (AAA).