Oil Hits $84 on Iran Conflict
Brent crude oil prices surged to $84/barrel, a 15-16% weekly increase, as the Israel-Iran conflict enters its fifth day. The Pentagon is reportedly reviewing resupply timelines after former Secretary of State Antony Blinken warned that "a prolonged conflict could severely deplete U.S. arsenals."
The current price of $84 per barrel is the highest Brent crude has traded since July 2024. While significant, this is still far from the all-time high of $147.50 reached in July 2008. Some analysts, however, project prices could reach $100 a barrel if the conflict causes further supply disruptions. The conflict has expanded beyond the Strait of Hormuz, a chokepoint for a fifth of the world's oil. Iran has reportedly attacked oil storage facilities in Fujairah, UAE, and the Port of Duqm in Oman, targeting alternative export routes. These actions have also forced the shutdown of the world's largest liquefied natural gas (LNG) plant in Qatar. The United States is the world's top oil producer and consumer, producing over 22 million barrels per day while consuming over 20 million. The U.S. became a net exporter of petroleum products in 2020. To counter supply disruptions, the U.S. maintains a Strategic Petroleum Reserve (SPR). As of late February 2026, the SPR held approximately 415 million barrels. This is up from recent years but well below the peak of 726 million barrels in 2010. The SPR was significantly drawn down in 2022 when the Biden administration sold 180 million barrels to combat rising prices, bringing reserves to a 40-year low. The Department of Energy has since been repurchasing oil to refill the reserve, aiming for a price cap of $79 per barrel, though some purchases have exceeded this price.
