Crude oil prices in international markets have surged sharply, rising by more than 40% in just a fortnight amid escalating conflict involving the United States, Israel, and Iran, triggering concerns over supply disruptions and renewed volatility in global energy markets.
On February 27, crude oil was trading at around $73 per barrel. By Saturday, prices had climbed to nearly $103 per barrel, marking an increase of $30, or about 41.1%, in a short span. The rally comes as geopolitical tensions in West Asia intensified, raising fears of disruptions along key global energy transit routes, particularly the Strait of Hormuz, one of the world’s most critical oil shipping lanes.
The latest escalation in the US-Iran conflict began on February 28, when US and Israeli forces carried out large-scale direct strikes on Iranian military targets and leadership. Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in the US-Israel-led attacks, significantly heightening geopolitical risk and adding a strong risk premium to crude prices.
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Market participants say the sharp rise reflects growing anxiety over potential supply shortages if the conflict widens or shipping routes in the Gulf region face restrictions. The Strait of Hormuz, through which a large portion of global oil exports passes, remains at the centre of market concerns. Any disruption to tanker movement through the narrow waterway can have a major impact on global supply chains and price stability.
Global oil and gas sector
A recent report by Systematix Institutional Equities (13 March 2026) said the global oil and gas sector has entered a phase of heightened volatility, with crude prices crossing $100 per barrel amid the ongoing West Asia conflict and tightening supply conditions linked to the Strait of Hormuz.
According to the report, destruction of oil and gas assets during the conflict has created a strong risk premium in prices, while restricted shipping routes have increased procurement costs. Tanker freight rates and insurance premiums for vessels moving through high-risk zones have risen sharply, adding to the burden for import-dependent countries such as India.
Systematix noted that upstream companies are benefiting from higher realizations, but the risk of windfall taxes remains. Refining margins have surged to above $20 per barrel as petrol and diesel cracks jumped sharply, even as marketing losses widened due to controlled retail fuel prices, leading to estimated industry losses of around ₹20 billion per day.
The report also highlighted that spot LNG prices have risen more than 50% in the past month after supply disruptions from Qatar, resulting in nearly 25% reduction in India’s gas availability, which could negatively affect gas utility companies.
Near outlook
Market experts say developments in West Asia will continue to drive global markets in the near term, with investor sentiment remaining highly sensitive to geopolitical signals.
Ponmudi R, CEO of Enrich Money, said, “The week ahead is expected to remain highly volatile, with market direction largely influenced by developments surrounding the ongoing conflict in the Middle East. Investors will closely track statements from key government officials and global stakeholders for any signals of escalation or potential diplomatic de-escalation.”
He added that such developments would play a crucial role in determining crude oil price trends, global bond yields, and currency market volatility, with particular focus on the Strait of Hormuz, considered one of the world’s most critical energy chokepoints.
Analysts warn that any prolonged disruption to shipments through the Gulf region could further tighten global supply, push inflation higher, and increase volatility across financial markets, especially in Asia, where many economies depend heavily on energy imports.
(With ANI inputs)
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