The global oil market is facing a major shock as crude oil prices rise sharply due to the ongoing war involving Iran, Israel, and the United States. The conflict, which began on February 28, has now entered its second week and is already creating serious concerns about energy supply and transportation in the Middle East. Oil prices briefly reached nearly $120 per barrel, showing how strongly the war is affecting global markets.
The price of Brent crude, which is the main international benchmark for oil, climbed to $119.50 per barrel on Monday. This is the highest price recorded since the period following Russia’s invasion of Ukraine in 2022. At the same time, West Texas Intermediate (WTI), the main oil benchmark in the United States, also surged and touched $119.48 per barrel during trading.
Although prices later dropped slightly and fell below the $100 mark on the same day, they still remain much higher than earlier levels. Before the United States and Israel launched military operations against Iran, crude oil was selling at around $70 per barrel. The sudden jump in prices reflects the deep uncertainty in global energy markets caused by the conflict.
The ongoing war is affecting some of the most important oil-producing and energy transport regions in the world. The Middle East plays a critical role in global oil supply, and any disruption there immediately affects international markets.
One of the biggest concerns is the situation in the Strait of Hormuz. This narrow waterway lies along Iran’s coast and is one of the most important oil shipping routes in the world. On a normal day, about one-fifth of the world’s total oil supply passes through this route. That means roughly 15 million barrels of crude oil move through the strait every day.
However, due to growing fears of missile and drone attacks, tanker traffic through the Strait of Hormuz has almost completely stopped. Shipping companies and oil exporters are worried about the safety of vessels passing through the region. The risk of attacks has made it extremely difficult for oil-producing countries to continue exports normally.
Several major oil producers in the region have already started reducing production. Countries such as Iraq, Kuwait, and the United Arab Emirates have reportedly cut output because they cannot ship oil easily and are running out of storage space. With tankers unable to move freely, oil is piling up in storage facilities, forcing companies to slow down production.
Energy infrastructure itself has also become a target during the conflict. Since the war began, oil and gas facilities in Iran, Israel, and other parts of the region have been attacked. These strikes have damaged key facilities and added to fears that global energy supply could be severely disrupted.
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Experts say the current crisis could become one of the biggest oil supply shocks in modern history. Nicholas Mulder, an economic historian who studies the impact of wars on global markets, described the situation as extremely serious.
According to him, the amount of oil supply being disrupted right now is much larger than during previous historic oil crises. He explained that the global market may be losing three to four times more oil than during the oil shocks of 1973 and 1979. Those earlier crises led to massive economic problems around the world, including fuel shortages and rising inflation.
The conflict has also caused damage to civilian infrastructure and essential services. Over the weekend, Israeli strikes reportedly hit oil storage depots in Tehran, causing large fires that continued burning for hours. At the same time, tensions spread across the Persian Gulf.
Bahrain accused Iran of launching an attack on a desalination plant that is crucial for producing drinking water. Such plants are extremely important in the Gulf region, where freshwater supplies are limited. Bahrain also reported a major attack on its refinery complex, which forced the national oil company to declare “force majeure.”
Force majeure is a legal term used when companies cannot fulfill contracts because of extraordinary events such as war or natural disasters. By declaring force majeure, the company informed buyers that it might not be able to deliver oil shipments as promised.
The wider energy supply chain is also being affected. Countries like Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, and the United Arab Emirates rely heavily on the Strait of Hormuz for oil and gas exports. With tanker traffic severely reduced, exports from these nations have slowed dramatically.
Energy experts warn that the situation could continue for weeks or even longer. Even if the conflict stops soon, restoring normal production levels will not happen immediately. Oil facilities damaged during attacks will need repairs, and storage systems will need to be cleared before production can increase again.
Jim Burkhard, vice president of crude oil research at S&P Global Energy, said the crisis has already moved beyond just transportation problems. According to him, production cuts and storage limits are now creating deeper challenges for the oil industry. Restarting full output, he said, will be a complex technical process that could take significant time.
The sharp rise in oil prices could also affect economies worldwide. Higher crude oil prices usually lead to more expensive fuel, higher transportation costs, and increased prices for goods and services. This could push inflation higher in many countries and slow economic growth.
For now, global markets remain highly uncertain. Investors, governments, and energy companies are closely watching developments in the Middle East. Much will depend on how the conflict evolves in the coming days and whether diplomatic efforts can reduce tensions.
Until then, the global oil market is likely to remain volatile, with prices reacting quickly to every new development in the region.
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