Oil Prices Surge as Iran Conflict Disrupts Hormuz Shipping

Oil prices surged after commercial traffic through the Strait of Hormuz halted on March 14, prompting a coordinated International Energy Agency emergency release and creating a backlog of vessels in the Gulf of Oman that tightened near-term supply dynamics.

Brent and U.S. Crude Rise Amid Conflict

Brent crude traded at $105.88 a barrel on March 16, rising 2.7% that day and more than 40% since the conflict began in late February and early March 2026. U.S. crude was just below $100 a barrel, up roughly 50% since the outbreak. These moves have increased volatility and elevated near-term supply risks for market participants.

Strait of Hormuz Shipping Disrupted

Selective transits continued on March 13, with four cargo vessels—including one Pakistani-flagged ship—crossing overnight, and a Turkish vessel authorized to transit after calling at an Iranian port. Meanwhile, about 400 vessels were backlogged in the Gulf of Oman, creating a growing logistical bottleneck for crude exports and commercial shipping.

On March 14, commercial automatic identification system (AIS) data recorded no confirmed crossings, marking the first full day without commercial transit since the conflict began. A drone attack at Fujairah halted oil loading, while Iran’s Kharg Island terminal remained operational but exported below prewar levels. Traffic through the Strait has dropped about 97% since late February, falling from 141 ships on February 27 to four on March 8, highlighting how quickly transit disruptions can tighten global supply routes.

IEA Emergency Release and Market Outlook

The International Energy Agency coordinated emergency releases totaling more than 400 million barrels of crude and petroleum products from over 30 countries to ease immediate price pressure and support supply.

Goldman Sachs described the conflict as producing an oil shock but said broad supply chains have not yet unraveled. Analysts warned that a prolonged closure of the Strait could push crude prices above $130 to $140 a barrel. Shipping operators are considering longer, costlier reroutes around the Cape of Good Hope, which could reduce traffic through the Suez Canal if closures persist. Economists noted that such shifts could increase inflation, transport costs, and food prices.

Markets are balancing the effects of a large coordinated release intended to calm prices against mounting operational constraints on the world’s busiest crude artery, a combination that will shape near-term volatility.