KEY INSIGHTS
Since the Middle East conflict began on February 28, 2026, instability has caused significant global energy prices pressures. The disruption of tanker traffic through the Strait of Hormuz and attacks on regional energy infrastructure drove Brent crude close to USD$120 per barrel, raised inflation risks, and increased the likelihood of slower growth across the global economy.
KEY EVENTS
February 28, 2026: The U.S. and Israel launched joint air strikes on Iran, marking the start of the current conflict.
March 2026: Iran targeted commercial shipping in the Strait of Hormuz and Persian Gulf, creating a de facto closure of the Strait, preventing maritime based oil exports.
March 11, 2026: International Energy Agency (IEA) member countries agreed to release 400 million barrels from emergency reserves, the largest such action on record.
March 19, 2026: Brent crude traded near USD$119 per barrel before easing to around $108, as markets weighed continuing attacks on Gulf energy assets.
ANALYSIS
The global energy market remains structurally exposed to disruptions and impacts from the conflict in the Middle East. The U.S. and Israeli strikes on Iran on February 28, triggered widespread Iranian retaliation targeting Gulf state oil infrastructure and impeding maritime traffic through the Strait of Hormuz. The Strait of Hormuz is a key export corridor for crude oil, transporting cargoes equal to 20 percent of global consumption. Constraints on exports forced Gulf producers to cut output by approximately 10 million barrels per day due to storage capacity limitations.
The expanded scope of Iran’s drone and missile campaign targeting Gulf energy infrastructure, including facilities in Kuwait, Qatar, the UAE, Oman, and Saudi Arabia, widened the market impact from crude exports to refining, gas processing, and liquefied natural gas (LNG). The immediate global economic effect has been inflationary. The International Monetary Fund stated it had observed disruptions to trade and economic activity, and volatility in financial markets. The Bank of England held interest rates and claimed the conflict had caused a significant increase in commodity prices.
OUTLOOK
Concentric assesses global oil prices will remain structurally sensitive to Middle East conflict dynamics. If disruption persists, Brent will likely remain elevated, inflationary pressure will continue, and central banks will likely attempt to contain price rises over supporting economic growth. For organizations, the main risk is sustained commodity volatility rather than a single price spike. Three key indicators will impact oil price volatility: the pace of any recovery in maritime export traffic, further attacks on Gulf energy infrastructure, and emergency stock releases and flexible OPEC+ policies.
Authored by: Alex Edwards
