Oil prices are expected to rise further as the US-Israeli war with Iran enters its third week, threatening key energy facilities and keeping the Strait of Hormuz largely shut.
Brent and US West Texas Intermediate crude have already jumped more than 40% this month, reaching their highest levels since 2022 after Iran halted shipping through the Strait of Hormuz, a chokepoint that normally carries about 20% of the world’s seaborne oil supply.
The conflict intensified after US strikes targeted military sites on Iran’s Kharg Island, the country’s main oil export hub. President Donald Trump warned that more strikes could follow, raising fears of further escalation.
Energy markets were also rattled after Iranian drones struck an oil terminal in Fujairah in the United Arab Emirates, a major export route for the UAE’s Murban crude.
Analysts warn the war is now threatening multiple key energy sites across the Gulf, including Saudi Arabia’s Ras Tanura export terminal and the Abqaiq oil processing facility, both considered highly vulnerable to attacks.
To limit the price surge, the International Energy Agency said more than 400 million barrels of emergency oil reserves will be released, the largest coordinated release in its history. Supplies from Asia will begin flowing immediately, while reserves from Europe and the Americas are expected later in March.
Despite the intervention, global oil supply could still fall sharply. The IEA estimates that shipping disruptions may cut about 8 million barrels per day from global supply, while Middle Eastern producers have already reduced output by at least 10 million barrels per day.
Diplomatic hopes remain limited. According to sources, the Trump administration has rejected attempts by regional allies to begin ceasefire negotiations, while Iran has said it will not consider a ceasefire until US and Israeli attacks stop.
For now, energy markets remain on edge as the war continues to threaten the largest oil supply disruption in years.
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