Oil prices surge past $100 per barrel for first time since 2022 as Iran war disrupts global supply
Strait of Hormuz effectively closed as G7 considers emergency release of 400 million barrels from strategic reserves to calm markets
SRINAGAR — March 9, 2026 — Global oil prices have surged past $100 per barrel for the first time in more than three years as the escalating war between the United States, Israel and Iran disrupts production and shipping through the world’s most critical energy corridor, threatening to reignite inflation and slow economic growth worldwide .
Brent crude futures, the international benchmark, traded at $117.08 per barrel in early Asian trading on Monday, a 26 percent jump, while US West Texas Intermediate crude rose nearly 29 percent to $119.96 per barrel . The last time prices traded above $100 was in July 2022, following Russia’s invasion of Ukraine .
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The price surge comes as the conflict between Iran and US-Israeli forces entered its tenth day, with Iranian missile and drone attacks effectively halting tanker traffic through the Strait of Hormuz, through which approximately 15 to 20 million barrels of crude—about 20 percent of the world’s daily oil supply—typically passes .
Supply shock roils markets
The conflict has removed an estimated 20 million barrels of oil from the global market each day, creating a supply deficit with “no sign of relief,” according to Clayton Seigle, an analyst cited by The Guardian . Iranian officials have warned that continued attacks could push prices even higher.
“If you can tolerate oil at more than $200 per barrel, continue this game,” a spokesperson for Iran’s Islamic Revolutionary Guard Corps (IRGC) said, according to reports .
The shock has reverberated through financial markets worldwide. Japan’s Nikkei 225 dropped more than 7 percent, South Korea’s Kospi fell by a similar margin, and Australia’s ASX 200 declined by over 4 percent . European and Asian markets lost around 1.5 percent in early trading, with North American market futures down by a similar percentage .
Veteran market strategist Ed Yardeni warned that soaring energy costs could dramatically alter the outlook for equities in 2026, effectively eliminating the likelihood of a euphoric rally in stocks . Yardeni now estimates the odds of a US recession have increased to about 35 percent, up from roughly 20 percent previously, while the probability of a runaway rally in equities has fallen sharply to just 5 percent .
G7 considers emergency intervention
Finance ministers from the Group of Seven (G7) are set to discuss a possible coordinated release of crude from strategic reserves as oil prices surge, according to reports from the Financial Times and the Australian Financial Review .
The emergency meeting, which will also involve the head of the International Energy Agency (IEA), is expected to examine the potential release of between 300 million and 400 million barrels of crude oil from global strategic stockpiles .
The proposed release would exceed the coordinated action taken in 2022 following Russia’s invasion of Ukraine, when the IEA organised the release of 240 million barrels from member countries’ reserves. At the time, the United States supplied roughly half of the total volume .
News of the possible intervention triggered a brief selloff in oil markets, trimming recent gains in Brent and West Texas Intermediate. Both benchmarks, however, remained above $100 per barrel, reflecting continued geopolitical risk premiums .
The discussion marks a shift from the position expressed last week by Fatih Birol, the IEA’s executive director, who had said global oil markets were well supplied and that no emergency action was under consideration .
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Analysts cautioned that even a coordinated release of up to 400 million barrels may have only a limited impact on prices if geopolitical tensions persist and supply risks remain elevated .
Economic fallout spreads
The price surge is already reshaping expectations across the global economy. Renmin University economist Wang Jinbin told China Media Group that oil price spikes suppress overall market risk appetite and have strong spillover effects beyond the Middle East .
“The most direct result is the decline of risk assets, so we see the stock market falling,” Wang said. “The surge in oil prices will also push up inflation expectations, causing major central banks, especially the US Federal Reserve, to delay interest rate cuts again and again” .
Wang noted that oil is an important production cost, so rising prices will drive global economic downturn. Regions highly dependent on Strait of Hormuz shipments face more significant inflationary pressure and downside risk .
In South Korea, the Bank of Korea faces an inevitable upward revision of its 2.2 percent inflation forecast for this year . Morgan Stanley recently analyzed that a $10 per barrel increase in international oil prices would raise South Korea’s consumer prices by 0.6 percentage points .
Kim Myung-sil, researcher at iM Securities, said in a report that “expectations for prices stabilizing in the low 2 percent range appear difficult to materialize,” adding “considering oil’s spillover effects on other commodity prices, we may need to leave open the possibility of re-entering the 3 percent range” .
The won’s sharp depreciation against the surging dollar is compounding inflationary pressures, with the exchange rate approaching 1,500 won per dollar—the highest level since the global financial crisis .
Trump defends spike as necessary cost
US President Donald Trump addressed the price surge on social media, arguing that the short-term spike is worth the cost if it eliminates Tehran’s nuclear threat .
In a post on Truth Social, Trump argued that oil prices would drop rapidly once Iran’s nuclear capabilities are destroyed, calling it “a small price to pay” for American and world safety and peace .
Trump also told ABC News that he had not ruled out sending special forces to seize Iran’s enriched uranium stockpiles, adding that “all options are on the table” .
Banking warning on US economy
Bank of America issued a stark warning that if oil prices remain above $100, the US economy could face a “non-linear shock” that might end the current bull market .
Claudio Irigoyen, a Bank of America global economist, noted that high oil prices threaten the economy far beyond simple inflation concerns. If the situation escalates to keep prices above $100, “the situation becomes much more worrying,” Irigoyen wrote in a note to clients .
The bank’s analysis suggests that high-income consumers, who drive spending, are closely tied to stock market performance. If high oil prices cause sustained market weakness, these consumers will reduce spending, amplifying economic damage. Meanwhile, low-income groups are suffering from surging energy costs, with US gasoline prices posting their largest three-day gain since 2008 .
Bank of America also warned that high energy costs are becoming a “bottleneck” for the artificial intelligence industry, as electricity is critical for data centers. If tech giants delay data center construction due to rising energy costs, it could drag US GDP growth by about 0.6 percentage points this year .
If oil prices double from current levels, Irigoyen warned, it would “very likely trigger a recession” .
Oil prices breaching $100 per barrel marks a critical threshold in the escalating Middle East conflict, with the effective closure of the Strait of Hormuz removing millions of barrels from daily global supply. The surge threatens to reignite inflation just as central banks were hoping price growth would cool, potentially complicating interest-rate policy and weighing on global growth.
As G7 finance ministers scramble to coordinate an emergency response, the trajectory of oil prices has become one of the most important forces shaping financial markets and the global economy. For consumers already grappling with high living costs, the ripple effects—from surging gasoline prices to higher transportation and manufacturing expenses—are only beginning to be felt.
With inputs from
- Reuters: “Oil prices hit highest since 2022 at more than $119 a barrel on Iran war”
- Al Jazeera: “Iran war threatens prolonged impact on energy markets as oil prices rise”
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