Oil Prices Surge as Iran Conflict Drags On

Investors brace for impact on jobs, consumer confidence, and the Federal Reserve's next move

Mar. 29, 2026 at 11:36am

Got story updates? Submit your updates here. ›

The war in Iran has now entered its fifth week, with the closure of the Strait of Hormuz choking off a significant portion of global oil supply. Oil prices have surged more than 45% over the past month, sparking concerns about the economic fallout. Investors are closely watching the March jobs report, consumer sentiment data, and signals from the Federal Reserve as they navigate the turbulent market conditions.

Why it matters

The disruption of oil supply from the Strait of Hormuz is an unprecedented event that has far-reaching implications for the global economy. The surge in energy prices could dampen consumer spending, weigh on business investment, and force the Federal Reserve to take a more hawkish stance on monetary policy, potentially exacerbating the economic challenges.

The details

The closure of the Strait of Hormuz has effectively removed 15 million to 16 million barrels of oil per day from the market, sending prices for Brent crude and US WTI crude up more than 45% and 50%, respectively, over the past month. This disruption is "every analyst's study piece, or worst nightmare that we thought could never happen," according to BP chief economist Gareth Ramsay.

  • The Iran war has been ongoing for five weeks.
  • Oil prices have surged more than 45% over the past month.

The players

Gareth Ramsay

BP chief economist

Mohammad Baqer Qalibaf

Iranian parliamentary speaker

Andrew Husby

BNP Paribas senior US economist

Pierfrancesco Mei

Goldman Sachs US economist

Aditya Bhave

Director and global economist at BofA Global Research

Got photos? Submit your photos here. ›

What they’re saying

“I don't think you really compare this with any disruption in the past. The disruption of the Strait of Hormuz is every analyst's study piece, or worst nightmare that we thought could never happen.”

— Gareth Ramsay, BP chief economist

“The Strait of Hormuz 'cannot be the same as before and return to its previous conditions'.”

— Mohammad Baqer Qalibaf, Iranian parliamentary speaker

“We tend to think that with businesses already running lean on new hiring demand, a more severe shock than seen thus far to energy prices or confidence would be needed in order to break out of the current low-hire/low-layoff equilibrium.”

— Andrew Husby, BNP Paribas senior US economist

“Accounting for both job gains in the energy industry and job losses elsewhere, we estimate that higher oil prices will reduce payroll growth by roughly 10k per month on net through year-end.”

— Pierfrancesco Mei, Goldman Sachs US economist

“We think markets are now anticipating a more hawkish Fed reaction function and, possibly, a broader commodity shock.”

— Aditya Bhave, Director and global economist at BofA Global Research

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

The ongoing conflict in Iran and the resulting disruption to global oil supply has far-reaching economic implications. Investors are closely watching for signs of how this will impact the labor market, consumer confidence, and the Federal Reserve's monetary policy decisions in the coming months.