Global oil markets saw a sharp surge in early trading as tensions in the Middle East flared into open conflict between Iran and the joint forces of the United States and Israel. Brent crude, the key international benchmark, climbed as high as 82.37 US dollars per barrel, its highest level since January 2025. It later eased to 79.86 dollars, still up 9.5 percent from February 27 and about 30 percent higher since the start of 2026.
The US oil benchmark, West Texas Intermediate (WTI), rose nearly 7 percent to 71.68 dollars per barrel, also reaching its highest level since mid-2025. Analysts say the spike reflects deep concerns over supply disruptions through the Strait of Hormuz the world’s most critical oil chokepoint.
Roughly 15 million barrels of crude oil and vast quantities of liquefied natural gas (LNG) pass through the narrow waterway every day, connecting the Persian Gulf with the Indian Ocean. Since the outbreak of the conflict on February 28, tanker movement through the strait has largely come to a halt, with insurers warning shipowners of policy cancellations and higher coverage premiums.
Max Layton, global head of commodities research at Citibank, said Brent could trade between 80 and 90 dollars a barrel while the fighting continues. “If the conflict drags on, prices could easily surge to 120 dollars a barrel,” he noted. “Iran hasn’t officially closed the Strait of Hormuz, but risk aversion among shippers is already real.”
Meanwhile, OPEC+, which includes Saudi Arabia, the UAE, and Russia, announced on March 1 an increase of 206,000 barrels per day in its April production target. However, analysts say this modest hike will do little to calm markets, as the real concern lies in transport risks rather than production capacity.
Jorge Leon, head of geopolitical analysis at Rystad Energy, said, “If Gulf flows are constrained, higher output on paper will offer little immediate relief. Access to export routes is now far more important than capacity figures.”
For Singapore, higher oil prices will directly affect fuel costs for motorists, while rising LNG prices could have an even broader impact. The country generates most of its electricity from natural gas, and although much of it comes through regional pipelines, LNG now plays a growing role following a long-term supply deal with Qatar the world’s top LNG exporter.
According to Rystad estimates, a full closure of the Strait of Hormuz could remove 22 percent of global LNG supply from the market, including shipments from Qatar, the UAE, and Oman.
Stephen Innes, managing partner at SPI Asset Management, said, “War jitters are now dictating market sentiment. In such conditions, oil prices rarely move in straight lines volatility is the new normal.”
Analysts warn that if the Middle East conflict continues to expand, it could trigger the most significant energy crisis of 2026, with global economic repercussions.
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