Iran war: oil price soars 53% in one month
One month after the Iran, U.S and Israel war began, crude oil prices have jumped by over 50 per cent. The Brent benchmark has jumped 53 per cent since February
- By Muyiwa Lucas
One month after the Iran, U.S and Israel war began, crude oil prices have jumped by over 50 per cent. The Brent benchmark has jumped 53 per cent since February 27, the day before the U.S. and Israel launched strikes against Iran, while West Texas Intermediate (WTI) has gained 45 per cent since then. On a weekly basis, Brent gained about 0.3 per cent, while WTI gained over one per cent.
And the trend may be on the rise. At the start of the week, oil prices began on a high, reflecting scepticism about prospects for a ceasefire in the month-old Iran war. Brent crude futures rose by $4.56, or 4.2 per cent, to $112.6 a barrel. U.S. West Texas Intermediate futures rose $5.16, or 5.5 per cent, to settle at $99.64.
While Trump extended his deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy infrastructure, the U.S. has also sent thousands of troops to the Middle East, with Trump weighing whether to use ground forces to seize Iran’s strategic oil hub of Kharg Island.
“We look for the oil market to develop an immunity to Trump’s conciliatory comments and optimistic tone regarding a deal, especially given apparent intentions to send an additional 10,000 troops toward Iran,” oil trading adviser Ritterbusch & Associates said in a note to clients.
The Iran war has taken about 11 million barrels per day out of global oil supply, with the International Energy Agency (IEA) describing the crisis as worse than the two 1970s oil shocks combined.
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“Every day flows through the Strait remain restricted, more than 10 million barrels of oil are missing ... tightening the oil market further,” said UBS analyst Giovanni Staunovo.
Analysts at Macquarie Group said that oil prices will fall quickly if the war begins to wind down soon but still remain above pre-conflict levels. However, prices could rise to $200 if the war drags on until the end of June, they added.
To cushion the effect, various governments moved to release and build oil reserves as the supply shock from the Iran war deepened and the Strait of Hormuz remained constrained. Japan began releasing about one month of state-held crude, adding to earlier draws from private stockpiles, while the United States is already in the middle of one of its largest-ever Strategic Petroleum Reserve releases to contain price spikes.
At the global level, the IEA confirmed that more than 400 million barrels are being injected into the market, with the option to release additional volumes if disruptions persist. At the same time, import-dependent countries are moving to expand buffers rather than just draw them down.
India is accelerating long delayed storage projects, including a new four million tonne facility at Chandikhol and expanded capacity at Padur, as officials prepare for prolonged supply risk. The combined signal is clear. Emergency stocks are being used to stabilise the market in real time, but governments are also racing to rebuild and expand reserves as the conflict exposes how quickly global supply can be disrupted.
