Commodities

Oil rises above $100 as US-Iran conflict disrupts supply

Nikos Tzabouras Written by Nikos Tzabouras

USOIL Analysis

The US-Israel strikes against Iran are now in their second week and investors grapple with prospects of a prolonged campaign. The US President has demanded unconditional surrender [1], while Iranian Foreign Minister Araghchi told CNBC last week that Tehran is not looking to negotiate. [2] The conflict is now affecting the supply of crude which can tighten the market and alter previously unfavourable fundamentals.

The Straits of Hormuz remain effectively shut, the United Kingdom Maritime Trade Operations (UKTMO) has reported multiple attacks on tankers in the region [3], while oil facilities in the Middle East are being targeted. Israel has "struck a number of fuel storage facilities in Tehran" [4], while Saudi Aramco's Ras Tanura refinery has been targeted by drone according to Reuters [5]. Meanwhile, Kuwait Petroleum Corporation announced reductions in production and refining [6], while UAE's Abu Dhabi National Oil Co said it is "carefully managing offshore production levels" as storage fills up. [7]

As the ongoing conflict impacts oil facilities and distribution, prices soar. USOil extends its gains past $100/barrel, hitting the highest levels in nearly four years, bringing the 2022 peak (129.46) to the forefront. Nonetheless, USOil already pulls back from its highs and there are factors that can lead to declines.

A well-supplied market may be able to absorb supply disruptions if they don't get out of hand, while any release of reserves could potentially offer near-term support. Moreover, President Trump may have said that higher oil prices are "a very small price to pay" [8], but if they persist they may create problems with his aim to lower the cost of living and preference for lower borrowing costs. That could incentivise the US President to conclude the campaign, while Tehran may also shift its stance as the strikes go on.

Meanwhile, supply disruption tailwinds can eventually turn into demand destruction headwinds, as an ongoing war and high energy prices raise stagflation risks that can hit the global economy. International Monetary Fund Director Kristalina Georgieva warned a prolonged conflict has the potential to affect "global energy prices, market sentiment, growth, and inflation". [9]

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.

As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.

References

1

Retrieved 09 Mar 2026 https://truthsocial.com/@realDonaldTrump/posts/116182551337254643

2

Retrieved 09 Mar 2026 https://www.youtube.com/watch

3

Retrieved 09 Mar 2026 https://www.ukmto.org/recent-incidents

4

Retrieved 09 Mar 2026 https://www.idf.il/en/mini-sites/operation-roaring-lion/real-time-updates-operation-roaring-lion/

5

Retrieved 09 Mar 2026 https://www.reuters.com/business/energy/saudi-aramco-shuts-ras-tanura-refinery-after-drone-strike-source-says-2026-03-02/

6

Retrieved 09 Mar 2026 https://x.com/kpcofficialkw/status/2030282290635407790

7

Retrieved 09 Mar 2026 https://www.zawya.com/en/press-release/companies-news/adnoc-group-update-on-continued-operations-ehk8ijl1

8

Retrieved 09 Mar 2026 https://truthsocial.com/@realDonaldTrump/posts/116196014942465383

9

Retrieved 03 May 2026 https://www.imf.org/en/news/articles/2026/03/05/sp030526-shaping-asias-future

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