Oil Hits Two-Year High
Crude oil has reached its highest price in two years as the Iran war intensifies, with US crude futures up 12% per barrel. Commodities are signaling major inflation risks — Gold +1.4%, Silver +2.5%, WTI Oil +12.9%, Brent +9.2% in a single session. Crude hit $81 (WTI) / $84.20 (Brent) with the biggest weekly gains since 2022.
The recent surge in oil prices is primarily driven by the de facto closure of the Strait of Hormuz, a critical chokepoint for global energy supplies. Iran has threatened any vessel sailing through the strait in retaliation for U.S. and Israeli strikes, effectively halting the passage of roughly 20% of the world's daily oil supply and leaving hundreds of ships anchored. This escalation follows a coordinated military campaign on February 28, 2026, which targeted Iranian military, nuclear, and command infrastructure, leading to significant uncertainty. In response, Iran has launched retaliatory attacks across the Gulf region, upending energy and transport sectors. The conflict has already forced the shutdown of some oilfields in Iraq and led Kuwait to cut production due to a lack of storage capacity. The market reaction has been swift and dramatic, with the international benchmark Brent crude surging to over $94 a barrel, its highest since November 2022. West Texas Intermediate (WTI) futures also jumped to over $90 a barrel, a high not seen since August 2022. This represents the most significant weekly price jump for oil since the 2022 Russian invasion of Ukraine. With Middle Eastern supplies curtailed, refiners are scrambling for alternatives, causing prices for heavier crude grades from the U.S. Gulf of Mexico, Canada, and Venezuela to spike. The price for Mars sour crude, a key U.S. grade, hit its highest premium over WTI since April 2020. Analysts warn that a prolonged conflict could push oil prices well above $100 a barrel, potentially triggering a major supply shock and risking stagflation in the global economy. Some projections suggest prices could even reach $150 a barrel if Gulf exporters are forced to shut down production entirely. In response to the crisis, Saudi Arabia has begun redirecting some oil shipments through Red Sea ports to bypass the Strait of Hormuz. The United States has also signaled it may release oil from its strategic reserves to help ease the pressure on global supplies.
