Oil soars past $100 a barrel as conflict continues in Iran : NPR

A thick plume of smoke rises from an oil storage facility hit by a U.S.-Israeli strike Saturday evening in Tehran, Iran, Sunday, March 8, 2026.

Vahid Salemi/AP

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Vahid Salemi/AP

The price of Brent crude oil, the global benchmark, rose above $100 as energy markets opened on Sunday. Crude oil was last in triple digits in 2022, after Russia invaded Ukraine.

The average price of gasoline in the United States has already jumped about 50 cents in a week, from just under $2.98 to $3.45, according to AAA. Patrick de Haan, the oil analyst for the GasBuddy app, says gasoline is expected to hit a national average of $4 this week.

In the days immediately following the US and Israeli attacks on Iran, traffic deteriorated rapidly. near-stoppage in the Strait of Hormuza key waterway through which approximately 20% of the world’s oil and liquefied natural gas typically passes. And oil prices did increase – but not extravagantly. At the time, traders believed that markets could easily absorb a brief disruption. The question was how long the conflict would last.

From $70 before the attack, prices were slightly above $80 by mid-week. Then the price rally began to accelerate, closing near $93 on Friday.

“We went from traders with ice in our veins to traders with panic in our veins,” Rebecca Babin, an energy trader at CIBC Private Wealth, said Friday.

Prices climbed again when markets reopened after their weekend, pushing north of $109.

The panic is partly because there is no clear plan to reopen the Strait of Hormuz. After Iran’s Revolutionary Guards declared the strait closed and attacked several oil tankers, shipowners were reluctant to risk the loss of a ship and its crew, and insurance costs to cover the passage rose sharply. The continued closure of the strait has prompted Iraq and Kuwait to halt production from some fields because there is nowhere to store the oil those fields would produce.

The United States offered to provide the ships with insurance and naval escorts. On Friday, the agency responsible for offering this insurance said it could provide total coverage of up to $20 billion, on an ongoing basis, to eligible ships. But JPMorganChase estimates the amount of insurance needed to cover all Gulf oil tankers at more than $350 billion.

As for naval escorts, Neil Roberts, head of marine and aviation at the influential Lloyd’s Market Association insurance group, says some shipowners are wary. “There seems to be a general view that it might be better to have neutral escorts rather than U.S. ones, because the U.S. is a belligerent,” he says.

He pointed out that when the U.S. military escorted ships through the strait in the 1980s, during a war between Iran and Iraq, the United States was a neutral party.

Furthermore, it is becoming increasingly clear that unlike some previous conflicts in the Middle Eastthis one is without sparing oil and gas infrastructure.

Refineries and LNG facilities in Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates have been the target of attacks largely blamed on Iran. During this weekend, Israel hit critical oil facilities in Tehran.

Although the closure of the Strait of Hormuz is extremely disruptive, it could also be reversed quickly; once reopened, oil flows could resume as long as all necessary infrastructure could still function.

Yet if infrastructure is seriously damaged in oil-rich Gulf countries, production could take much longer to return to normal, even after missile strikes stop.

Until this crisis, the world was oversupplied with oil. There are certain stocks, notably the American strategic petroleum reserve, which have not yet been exploited. And some of the oil destined for the Strait of Hormuz could be redirected into pipelines – assuming, of course, that these pipelines and other key infrastructure are not attacked. Currently, around 20 million barrels of oil per day cannot pass through the strait, creating a global deficit.

This deficit could be partly filled, believes Kevin Book, co-founder of the research firm Clearview Energy Partners. “We might be able to use alternative routes and strategic reserves to get down to a deficit of between 1 and 3 million barrels per day,” he says.

“But,” he continues, “there is still a huge gap.”