Oil prices exceed 100 dollars as Strait of Hormuz crisis deepens

Monday 16 March 2026 - 15:20

By: Dakir Madiha

Oil prices exceed 100 dollars as Strait of Hormuz crisis deepens

Oil prices climbed above 100 dollars per barrel at the start of the week as the conflict involving the United States, Israel, and Iran entered its third week, raising concerns about prolonged disruption to global energy supplies.

West Texas Intermediate, the main United States benchmark, rose to around 100 dollars per barrel, while Brent crude, the international benchmark, climbed above 106 dollars, according to AFP. The surge comes as the Strait of Hormuz remains largely closed to commercial shipping and military tensions escalate around Iran’s key oil infrastructure.

United States President Donald Trump said American forces had destroyed all military targets on Iran’s Kharg Island, the country’s most important oil export terminal, which handles roughly 90 percent of Iran’s crude shipments. Trump said the United States had avoided striking the island’s oil facilities but warned that the decision could be reversed if Iran continues to block maritime traffic through the Strait of Hormuz.

In remarks to NBC News, Trump also suggested that the United States could strike the island again, signaling the possibility of further escalation.

The strait has remained effectively closed since shortly after United States and Israeli strikes against Iran began on February 28. Iran’s Islamic Revolutionary Guard Corps warned that any ship attempting to pass through the waterway could be targeted.

Energy analysts estimate that the conflict has cut roughly 17 million barrels per day of oil and refined product supply from the Persian Gulf, according to S&P Global Energy figures cited by The New York Times. The Wall Street Journal reported that the deployment of a United States Marine expeditionary unit could allow Washington to attempt control of Kharg Island, though analysts warn such an operation would carry significant military risks.

In response to the supply shock, the International Energy Agency approved the release of a record 400 million barrels from member countries’ emergency reserves. The intervention exceeds the 182.7 million barrels released during the global response to Russia’s invasion of Ukraine in 2022.

IEA Executive Director Fatih Birol described the move as a major action but emphasized that reopening the Strait of Hormuz remains critical to restoring stability to global oil markets.

Financial institutions expect the pressure on energy prices to continue. Goldman Sachs forecast that Brent crude would average above 100 dollars per barrel throughout March and warned prices could rise further if disruptions last for months.

The energy shock is also influencing expectations for global monetary policy. A Reuters survey of 96 economists showed that most anticipate the United States Federal Reserve will keep interest rates unchanged at its March meeting. Markets now expect roughly 20 basis points of rate cuts by the end of the year, down from about 50 basis points before the conflict began.

Economist Mohamed El-Erian predicted inflation could average around 3 percent in 2026, remaining well above the Federal Reserve’s 2 percent target.

Trump also urged China and NATO allies to help secure the Strait of Hormuz, warning that failure to restore safe passage could have serious consequences for the alliance’s future.