Iran Conflict Threatens Global Energy Prices

Disruptions to oil and gas shipments through the Strait of Hormuz could drive up costs for consumers worldwide.

Published on Mar. 2, 2026

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Oil prices are expected to surge when markets reopen on Sunday evening, as the recent U.S.-Israeli attacks on Iran could severely restrict supplies from a key oil and gas-producing region. Even if the disruption is brief, it will almost certainly make energy more expensive worldwide, with the magnitude and duration of the price increases depending on how the conflict unfolds.

Why it matters

Higher energy prices could cause domestic political blowback for President Trump, whose approval ratings have tumbled in part because many Americans are concerned about inflation. The longer the war disrupts the energy trade, the bigger the risk that consumers will face higher prices not just at the gas pump but in a broad array of products.

The details

The Strait of Hormuz, a narrow waterway off Iran's southern coast, is a crucial chokepoint for global energy shipments, with about one-fifth of the world's oil and a significant amount of natural gas usually passing through daily. By Sunday, the flow of tankers carrying these products had slowed to a trickle, though no major energy assets in the region appeared to have been struck as of late Sunday in Iran.

  • On March 1, 2026, oil prices are widely expected to surge when markets reopen.
  • In February 2022, gas prices peaked at $5.02 per gallon after Russia invaded Ukraine.

The players

United States

The U.S. has carried out attacks on Iran, which could severely restrict supplies from a key oil and gas-producing region.

Israel

Israel has joined the U.S. in attacks on Iran, which could disrupt energy supplies from the region.

Iran

Iran is a key oil and gas producer, and the conflict with the U.S. and Israel could lead to disruptions in energy supplies from the region.

President Trump

Higher energy prices could cause domestic political blowback for President Trump, whose approval ratings have tumbled in part because many Americans are concerned about inflation.

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What’s next

The magnitude of the price increases and how long they last will depend on what the United States and Israel do next — and how Iran responds.

The takeaway

This conflict highlights the global economy's vulnerability to disruptions in energy supply, especially from key regions like the Middle East. Policymakers and consumers will be closely watching how the situation unfolds and its potential impact on energy prices and the broader economy.