Strait of Hormuz Closed as Oil Prices Surge Sharply
The Strait of Hormuz was officially closed on Saturday, 28 February 2026, following an escalation of conflict between Iran, the United States and Israel. The closure of this vital energy corridor immediately shook global oil and gas markets.
Brent crude oil prices in Asian markets on Monday, 2 March 2026, surged to $80–$81.50 per barrel (approximately 1.35–1.37 million rupiah at an exchange rate of 16,700 rupiah to the dollar).
Meanwhile, commercial vessels were detained, and global shipping companies suspended operations in the Gulf region to prioritise crew and cargo safety.
At its narrowest point, the strait is only about 33 kilometres wide, with effective shipping lanes in each direction measuring approximately 3 kilometres.
This location makes the Strait of Hormuz strategically vital yet vulnerable. It is the sole exit route for oil from Persian Gulf nations including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Qatar bound for Asia and Europe.
Approximately 20 per cent of global oil consumption—roughly 20 million barrels per day—and nearly 20 per cent of global liquefied natural gas (LNG) passes through this corridor.
A number of vessels in the Gulf region received warnings against transit, and major shipping operators delayed voyages for safety reasons. Consequently, Brent crude prices surged sharply.
“We expect the situation to deteriorate before it stabilises. However, the unknown factor is Iran’s intent and capability to blockade the Strait of Hormuz, which would sharply drive up oil and gas prices,” explained Joseph Capurso, head of global economics at Commonwealth Bank of Australia, according to The Guardian on Monday, 2 March 2026.
Analysts estimate that if the Israel-Iran conflict continues, global oil prices could reach $100 per barrel or approximately 1.686 million rupiah.
“This increases inflation directly through elevated fuel prices, but could extend to broader price increases. Simultaneously, this tends to reduce economic growth through diminished consumer purchasing power,” explained Jonathan McMenamin, head of economics at Barrenjoey Bank.
“In reality, this situation represents a broader shock to the region if elevated oil prices continue, resulting in lost national revenue for those countries,” stated Richard Yetsenga, chief economist at ANZ.
Goldman Sachs investment bank estimates that LNG prices in Europe could rise by up to 130 per cent if shipping disruptions through the Strait of Hormuz persist for one month.
Heightened US–Iran tensions increase the risk of shipping disruptions, driving volatility in global LNG prices.
Should disruptions continue for more than two months, European gas prices could exceed 100 euros per megawatt hour, whilst Asian spot LNG could reach approximately $25 per MMBtu.