Global Oil Prices Surge to Multi-Year Highs as Iran Closes Strait of Hormuz and US-Iran War Enters Second Month

Global crude oil prices climbed to their highest levels in years this week as the US-Israeli military campaign against Iran entered its second month with no clear path to resolution, and Iranian forces maintained their stranglehold on the Strait of Hormuz, the critical shipping lane through which a fifth of the world’s daily oil supply typically passes.

Brent crude surged sharply on Wednesday following Iran’s Revolutionary Guard reaffirmation that the Strait would not be reopened to what it called “enemies of the nation,” effectively dismissing any diplomatic timeline put forward by Washington. The price spike immediately reverberated through every major economy, with governments from Southeast Asia to sub-Saharan Africa scrambling to announce fuel subsidy adjustments and emergency import arrangements.

The war, which began on February 28 when American and Israeli forces launched coordinated strikes against Iranian military and nuclear infrastructure, has fundamentally altered the global energy landscape. Saudi Arabia and the UAE have increased production to partially offset Iranian supply disruptions, but their additional output has not been sufficient to compensate for the combined loss of Iranian exports and the Strait closure’s impact on Gulf-wide shipping.

In the United States, retail gasoline prices have climbed steadily since the war began, becoming a source of growing political friction for the Trump administration. The president acknowledged public concern in his Wednesday night address, but insisted prices would fall sharply once military operations concluded. Economists and energy analysts were skeptical, noting that the market disruptions and redirected shipping routes create structural costs that do not disappear overnight.

Japan and South Korea, both heavily dependent on Gulf oil imports, have activated strategic petroleum reserves and are in emergency negotiations with alternative suppliers including the United States, Norway, and Nigeria. The European Union has convened an emergency energy security meeting to coordinate responses to what officials are calling the most serious supply disruption in decades.

Shipping companies have begun rerouting tankers around the Cape of Good Hope in southern Africa, adding weeks to journey times and significant costs to each cargo. Maritime insurance premiums for Gulf routes have more than doubled since the conflict began, further inflating the final price of delivered crude.

With no ceasefire in sight and both the US and Iran trading conflicting signals about the prospect of negotiations, energy market analysts are now pricing in the possibility of sustained supply disruption through the third quarter of 2026.