Oil is set to end the week above $100 a barrel for the first time since Monday, as Iranian strikes on Gulf energy facilities and shipping through the Strait of Hormuz keep supply uncertainties elevated and have cost producers $15 billion since the war began.
Crude has swung sharply through the week, spiking to nearly $120 on Monday, retreating on hopes of a swift end to the war, then surging past $100 again despite a record release of strategic reserves.
Brent, the benchmark for two-thirds of the world's oil, fell 0.60 per cent to $101.10 a barrel at 3.35pm UAE time on Friday. West Texas Intermediate, the gauge that tracks US crude, declined 1.32 per cent to $94.47 per barrel. Both are on pace for a fourth consecutive weekly gain.
Oil was already off to a strong start in 2026, but the war has significantly accelerated its gains: year-to-date, both Brent and WTI have soared nearly 70 per cent. Last year, both benchmarks had retreated by about 20 per cent.
“Whether the disruption [caused by the current war] becomes the long-feared 'nightmare scenario' for energy markets [and the global economy] now depends on the duration of the conflict and whether significant infrastructure is damaged,” said Daniel Yergin, vice chairman of S&P Global.
Gulf producers have lost $15.1bn in energy revenues since the war began, with at least $10.7bn in cargoes sitting loaded inside the strait and unable to reach their destinations, according to shipping analytics firm Kpler. The analytics firm estimates Hormuz carries $1.2bn worth of oil, gas and refined products on a normal day.
On Monday, Brent shot past $119.50, its highest since mid-2022, but lost momentum to settle at $98.50 after US President Donald Trump said the Iran war would soon end.
However, crude prices surged again on Thursday, surpassing $100 a barrel, as Iran continued to strike energy and transport infrastructure, deepening fears of an impending global energy crisis.
That happened despite the International Energy Agency on Wednesday announcing that it would release a record 400 million barrels of oil, aimed at tempering rocketing prices.
“Oil markets are global, so the response to major disruptions needs to be global too,” said Fatih Birol, executive director of the Paris-based IEA.
Separately on Thursday, the US also said it was releasing 172 million barrels of oil from its strategic petroleum reserves.
The IEA's move is “one solution” that could work if the war does not drag on or escalate to the point where additional production is shut down, said Garnet Powell, president and chief executive of Canada-based Allvista Investment Management.
“Strategic reserves are designed to cover import disruptions, not global production shutdowns on the scale that could occur if this war continues,” he said.
The conflict, which began on February 28, has severely disrupted traffic in the Strait of Hormuz, through which 20 million barrels per day flowed in 2025, roughly a quarter of the world's seaborne oil trade.
Export volumes are currently at less than 10 per cent of pre-conflict levels, forcing operators across the region to shut in or curtail a substantial amount of production, the agency said.
Iran has attacked ships that have passed through the waterway and has threatened more attacks. But US President Donald Trump suggested on Truth Social that oil tankers should “show some guts” and sail through the strait.
Iran's Islamic Revolutionary Guards said on Tuesday that not "one litre of oil" will be allowed to pass through the strait should US and Israeli strikes continue.
While the possibility of a full and sustained closure remains unlikely in most assessments, even partial disruptions can have tangible effects on trade flows – and energy is usually the first sector to feel the pain, with a trickle-down effect, analysts at Dubai-based logistics firm CF Global said.
“In such scenarios, governments often rely on strategic petroleum reserves to smooth short-term shocks … the ripple effects of energy market disruptions often extend quickly into broader supply chains,” they said.
Gulf countries have been dragged into the war, with Iran targeting energy facilities including Abu Dhabi's Ruwais Industrial Complex, Fujairah Port, the Port of Salalah in Oman, Iraq's Majnoon oilfield, as well as Bahrain's 380,000 bpd Sitra oil refinery and Aramco's 550,000 bpd Ras Tanura refinery, which were both hit twice.
Prices of natural gas have also soared, after QatarEnergy – which produces a fifth of global supply – declared force majeure amid Iran's strikes on the nation.
European natural gas prices surpassed €56 ($64.14) on March 3, a spike of about 75 per cent from February 27, the day before the war began, data from Trading Economics shows.
The situation “marks one of the most severe supply shocks the global energy system has ever faced”, said Irina Tsukerman, a geopolitical analyst in New York.
