Oil surges as war in the Middle East shakes global energy markets
Tensions in the Middle East have once again pushed the price of oil to the center of the global economic story, but this time the market is not reacting only to war headlines, but to a very concrete fear of disruptions in one of the world’s most important energy corridors. The Strait of Hormuz, a narrow sea corridor between the Persian Gulf and the Gulf of Oman, has become the point where geopolitics, transport, inflation, and monetary policy intersect. When a large share of the global trade in oil and liquefied natural gas passes through such a corridor, every disruption, or even the threat of disruption itself, is instantly translated into higher prices, higher insurance costs, more expensive transport, and a more cautious approach by investors.
That is precisely why business headlines around the world in recent days have revolved around the same question: how long can the global economy withstand the geopolitical risk premium built into energy commodities. In the market, it is no longer only about how many barrels are produced per day, but also about whether the goods can safely reach buyers at all. When tanker-clogged routes, limited alternative paths, and nervousness in financial markets are added to the equation, the rise in the price of oil stops being an isolated piece of news from the commodities sector and becomes a problem for industry, trade, household budgets, and the plans of central banks.
Why Hormuz is so important for the whole world
According to the International Energy Agency, the war in the region that began on February 28, 2026, has already significantly disrupted energy flows through the Strait of Hormuz and led to what that institution describes as the largest supply disruption in the history of the global oil market. The Agency states that flows of crude oil and oil products through the passage have fallen from approximately 20 million barrels per day before the outbreak of the war to only symbolic quantities. At the same time, the liquefied natural gas market has also been hit, with global LNG supply reduced by about one fifth.
The importance of that maritime choke point is not new, but it has now become entirely tangible. The IEA estimates that around 80 percent of the oil and petroleum products that passed through Hormuz in 2025 were destined for Asian buyers. This means that the disruption does not hit everyone equally, but instead affects major importers such as China, India, Japan, and South Korea particularly strongly. For European countries, the problem is twofold: directly through more expensive energy, and indirectly through higher transport costs, disruptions in supply chains, and pressure on industry, which is still operating in an environment of weaker growth.
The U.S. Energy Information Administration further warns that a temporary inability to pass through major maritime choke points causes delivery delays, higher transport prices, and a rise in global energy prices. In theory, part of the flows can be redirected through other routes, but in practice these alternatives are limited, slower, and more expensive. For part of the gas, such alternatives practically do not even exist. The IEA states that more than 110 billion cubic meters of LNG passed through Hormuz in 2025 and that almost the entirety of Qatar’s exports and a large part of the exports of the United Arab Emirates depend precisely on that passage. When such an artery is clogged, the consequences can no longer be contained only at the regional level.
The price of oil is no longer just a market figure
At the end of the week, on Friday, March 13, the international benchmark Brent crude remained above the threshold of 100 dollars per barrel, and some market reports recorded levels above 103 dollars as well. That is a level which in itself does not automatically mean a new energy crisis on the scale of 2022, but it is high enough to change the expectations of investors, carriers, airlines, and economic policymakers in a very short period of time. The market is not buying only the current shortage, but also the possibility that the disruption will be prolonged, spread to infrastructure in the Gulf, or grow into a more permanent security problem for shipowners.
This is precisely the key difference between an ordinary rise in the price of oil and a jump like this. When oil becomes more expensive because of firmer demand or reduced inventories, the market usually assumes that the higher price will gradually encourage additional supply or curb consumption. But when the price increase comes from war risk, the market has no clear mechanism of self-correction. If tankers cannot pass safely, if producers have to cut output because their exports are blocked, and if insurers significantly raise premiums, then the price becomes a reflection of uncertainty, not just of the relationship between supply and demand.
That uncertainty is further amplified by the fact that only a few months before the current escalation, almost the opposite mood prevailed. In its latest commodity markets review, the World Bank stated that in 2026 commodity prices in general could fall to their lowest level in six years, with the expectation that Brent could slide on average toward 60 dollars per barrel. In other words, the baseline for 2026 had been built on a scenario of relatively abundant supply and weaker demand growth. The wartime disruption in the Gulf abruptly shattered that framework and showed the market how fragile long-term projections are when a security shock returns to the equation.
The biggest blow is being felt by maritime transport
The war premium is visible not only in the price of crude oil, but also in the price of its movement. Data from the shipping market show that the cost of chartering a supertanker to transport oil from the Middle East to China has jumped sharply to more than 400 thousand U.S. dollars per day, which is roughly twice as much as immediately before the outbreak of the latest phase of the conflict. Such a jump does not remain within the shipping sector. It flows into wholesale fuel prices, logistics costs, aviation fuel prices, and ultimately into the prices of products paid by end consumers.
At the same time, this is not only about oil tankers. When tensions spill over into LNG, the cost of gas transport also rises, and with it the pressure on energy bills in countries that meet a significant share of their needs through imports. For the European market, which is still sensitive to changes in global gas flows after the Russian invasion of Ukraine, this is a reminder that formal diversification of supply does not remove geopolitical risk either. The energy source can change, but the vulnerability of supply routes remains.
That is why today’s shock has a broader reach than oil alone. It makes the transport of goods more expensive, increases the price of raw materials for industry, makes supply chain planning more difficult, and encourages companies to pay more for security, storage, and insurance. In such circumstances, the economy does not suffer only because of more expensive energy, but also because of the more expensive movement of everything else.
The IEA responds with a historic release of reserves
Aware that the market is no longer reacting only to daily headlines, but to a real disruption of physical supply, the International Energy Agency on March 11 made the decision on the largest coordinated release of oil from strategic reserves in its history. The IEA announced that 32 member states would make 400 million barrels from emergency stocks available to the market in order to mitigate disruptions caused by the war in the Middle East. The Agency states that members have more than 1.2 billion barrels of mandatory reserves at their disposal, along with additional industry stocks under government obligation.
This is a strong signal that the largest consumer economies want to show the market that they will not passively watch the destabilization of supply. Still, even such an intervention is not enough to fully calm prices if physical flows through Hormuz remain blocked. Strategic reserves can buy time, but they cannot permanently replace regular exports from the Persian Gulf. They can cushion the worst initial blow, prevent panic, and ease supply to refineries, but they cannot solve the problem in the long run if the war and the security risk remain the same.
That is precisely why the market reaction was only partial. The announcement of the record release of reserves did not remove the geopolitical premium from the price of oil, because investors assess that the real problem is not only the availability of barrels on paper, but the possibility of stable deliveries in the weeks and months ahead. If the conflict continues, the market will once again seek an answer to the question of how long reserves can fill the gap created by production cuts and the blockade of the key route.
Inflation returns to the focus of central banks
An energy shock is always more than a story about commodities. It quickly becomes a story about inflation. Research by the U.S. Fed shows that a strong oil price shock can noticeably raise overall inflation, by almost one percentage point at the moment of impact, although the effect on core inflation and real activity is often milder. But for central banks, the problem is that headline inflation strongly shapes the expectations of citizens and businesses. When citizens see more expensive fuel, they also expect more expensive food, delivery, travel, and utilities. When companies see more expensive energy and transport, they look for room to adjust prices or margins.
As far back as the end of December 2025, the European Central Bank estimated that inflation in the euro area in 2026 could average 1.9 percent, with a pronounced reliance on a data-dependent approach. Such projections were made in a much calmer energy environment. Now monetary authorities are facing a different type of risk: not classic overheating of demand, but the possibility that an external cost shock will once again raise prices precisely at the moment when they had been expected to ease.
This puts central banks in an uncomfortable position. If they react too early and too restrictively, they may further slow an economy that is already under pressure from more expensive energy and weaker confidence. If, on the other hand, they ignore rising energy prices, they risk another deterioration in inflation expectations and a delay in returning to targeted inflation rates. That is why today’s debate about interest rates is being conducted less and less only around domestic demand and the labor market, and increasingly around the question of how long the war shock will remain embedded in energy.
From gas stations to factory halls
The consequences of rising oil prices become visible most quickly at gas stations, but the economic chain is much longer. More expensive fuel raises the cost of road transport, maritime transport, and air traffic. This means more expensive goods delivery, higher input costs for agriculture and the food industry, more expensive airline tickets, and pressure on all sectors that depend on logistics. In industry, the rise in the price of energy commodities further burdens the production of fertilizers, chemicals, plastics, construction materials, and a range of products whose costs have already been exposed to external shocks for years.
For households, the effect is politically the most sensitive because it is visible every day. When fuel becomes more expensive, the feeling grows that everything has become more expensive, even when official statistics still have to adjust. Governments then come under pressure to intervene through taxes, subsidies, or administrative measures, although they know that such moves can be costly for the budget and short-lived. For countries that are major energy importers, the problem is further intensified by the weakening of the trade balance, and for poorer economies by the risk of worsening social tensions.
In that sense, the current rise in the price of oil is not just a story about investors and market charts. It is a story about how much food transport costs, how much holidays will become more expensive, how the prices of consumer goods will move, and whether companies will delay investments because they can no longer reliably estimate their own energy costs.
Why the market remains nervous even when there is enough oil on paper
Longer-term trends in the oil market have not disappeared. The IEA and the World Bank have for months been warning about slower demand growth, the growing role of electric vehicles, a gradual change in the structure of consumption, and the possibility of relatively abundant supply in the medium term. The IEA estimates that global demand for oil could reach a plateau by the end of the decade, with noticeably slower growth than in previous years. Under normal circumstances, such estimates would be an argument against permanently very high prices.
But the market is currently not living in normal circumstances. When on one side there is a projection of more comfortable supply in 2026, and on the other a real war risk that closes the passage through which a quarter of the world’s seaborne oil trade passes, the short-term shock completely suppresses medium-term logic. Investors, refineries, and governments are not deciding according to what might happen at the end of the year if everything remains calm, but according to what may happen in the next few days if the security situation deteriorates further.
That is why today’s price of oil is to a large extent the price of uncertainty. It contains within itself the risk of a physical shortage, the cost of insurance, fear of attacks on infrastructure, the possibility of new production cuts, and the fear that the shock could last longer than the market now assumes. In other words, a barrel is more expensive because instability is more expensive.
What could decide the direction of prices next
In the weeks ahead, three elements will be key. The first is the safety of navigation through the Strait of Hormuz and the possibility that at least part of normal traffic can be restored without new incidents. The second is the scope of the actual reduction in production in the Gulf states, because blocked exports very quickly become also a problem of storage and production at the sources themselves. The third is the political response of the major powers and consumer countries, including any new coordinated moves in the area of reserves, shipping security, and diplomatic pressure.
If the passage stabilizes partially, part of today’s risk premium could deflate relatively quickly. But if it turns out to be a more long-lasting disruption, the global economy will enter a period of more expensive energy, higher logistics costs, and significantly more difficult balancing between inflation and growth. This is the scenario that worries both governments and central banks, because it could once again raise the question of stagflation: a combination of slowing economic activity and rising prices.
For now, the most accurate thing to say is that oil has once again become a political commodity in the full sense of the word. Its price no longer speaks only about how much energy is being consumed, but also about how safe the world is, how vulnerable supply routes are, and how much room the global economy still has to absorb a new shock. As long as the war in the Middle East directly shakes Hormuz, every new signal from the region will remain stronger than most of the usual market indicators.
Sources:- International Energy Agency (IEA) – overview of the consequences of the war in the Middle East for the Strait of Hormuz, oil, and LNG, and assessment of supply disruptions (link)- International Energy Agency (IEA) – official statement on the record release of 400 million barrels from strategic reserves, March 11, 2026 (link)- U.S. Energy Information Administration (EIA) – explanation of why disruptions to passage through key maritime choke points raise transport costs and global energy prices (link)- World Bank – commodity markets review and expectations for 2026, including the earlier projection of lower energy prices before the latest escalation (link)- World Bank – Commodity Markets Outlook statement with estimates of the decline in the average Brent price in the baseline scenario for 2026 (link)- European Central Bank (ECB) – monetary decision from December 2025 with inflation and growth projections for the euro area (link)- Federal Reserve – analysis of the effect of oil price shocks on inflation and economic activity (link)- Reuters / Yahoo Finance – market report on Brent’s jump above 100 dollars after intensified attacks and fears for flows through Hormuz, March 12, 2026 (link)- MarketWatch – report on the week’s close with Brent above 100 dollars and continuing supply fears, March 13, 2026 (link)- The Straits Times / Reuters – data on the sharp rise in supertanker charter costs and LNG shipping in the region (link)
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