Oil prices are expected to jump sharply when markets reopen, as the US-Israel war with Iran and the effective closure of the strait of Hormuz unsettle global investors despite pledges from major producers to raise output.
US crude is on track to rise about 11% when trading resumes in New York, according to data from IG, potentially climbing above $74 a barrel from $67 on Friday. That would mark its highest level since June 2025, when the US launched strikes on Iran’s nuclear facilities.
The move comes even after OPEC+ agreed on Sunday to increase output by more than expected as it assessed the impact of the conflict.
Get the latest headlines in your email 
Strait of Hormuz disruption
Iran’s Revolutionary Guards reportedly told ships on Saturday that passage through the strait of Hormuz was prohibited, effectively shutting the vital choke point. About 20% of global oil supplies and an estimated $500bn of energy trade pass through the strait each year.
A tanker in the strait was attacked on Sunday, and Reuters reported that at least 150 vessels carrying crude, liquefied natural gas and oil products dropped anchor as traffic slowed to a near standstill. Vessels in the region also transport chemicals and fertilisers, raising concerns about knock-on effects for agriculture and food prices.
Tehran has long warned it could close the strait in retaliation for military action. However, Tamsin Hunt of S-RM said a full closure would be “devastating for Iran’s own economy”.
Market reaction
Analysts at Barclays said oil could reach $80 a barrel in the event of a “material supply disruption”. Royal Bank of Canada warned that regional leaders had cautioned Washington about the risk of “$100-plus oil” in the event of further escalation.
Higher wholesale prices are expected to filter through to motorists. The AA said the average UK petrol price stood at 132.9p a litre and diesel at 142.4p, with further rises possible. Luke Bosdet, an AA spokesperson, said escalating conflict threatened even higher fuel costs for drivers.
Stock markets are also braced for turbulence. London’s FTSE 100 is forecast to fall about 0.5% on Monday after hitting a record high on Friday.
Investors are expected to seek safe-haven assets. Gold, which has risen for four consecutive weeks, was up more than 2% on IG’s weekend markets, while silver gained over 3%.
Gulf markets and shipping risks
Eight Opec+ countries, including Saudi Arabia and Russia, agreed to raise output by 206,000 barrels a day in April, above earlier expectations. The move may ease pressure on prices, though the group said the step would also allow members to accelerate compensation adjustments.
The conflict has also pushed up the cost of insuring ships in the region. Dylan Mortimer of Marsh said attacks on shipping could have “major repercussions” for war insurance rates.
International Maritime Organization advised vessels to avoid transiting the affected area until conditions improve.
Most Gulf stock markets fell on Sunday. Saudi Arabia’s main index dropped 2.5%, although shares in Saudi Aramco rose 2.5% on expectations of higher crude prices. Kuwait suspended trading, while the UAE halted trading in Abu Dhabi and Dubai for two days, citing exceptional circumstances.
Join the discussion? 
Already a member? 
Adapted by ASEAN Now · Source · 01.03 2026