On February 28, the United States and Israel launched a military strike against Iran. In response, the Islamic Revolutionary Guard Corps of Iran announced a ban on all vessels passing through the Strait of Hormuz. Multiple oil tanker owners and traders have suspended the transportation of crude oil, fuel, and liquefied natural gas via this critical waterway. The conflict has triggered a sharp rise in international oil prices, raising market concerns about a potential global energy crisis.
Tensions in the Middle East have escalated once again. International oil and gold prices have climbed simultaneously, reflecting a significant increase in global risk aversion. Driven by this sentiment, gold prices have risen further, and several national financial markets experienced trading halts. Even before the military action, on the previous Friday, February 27, international oil prices had already begun to increase, with Brent crude and WTI crude rising by 2.78% and 2.45%, respectively. The current conflict, due to its intensity exceeding expectations—particularly coupled with Iran's blockade of the Strait of Hormuz—has intensified fears of an energy crisis.
However, considering fundamental supply and demand dynamics and the potential duration of the conflict, the impact on oil prices is more likely to be a short-term "impulse shock" rather than a full-blown, sustained energy crisis.
When global markets opened on Monday, March 2, international oil prices surged immediately. The price of Brent crude rose by over 13% at one point, exceeding $82 per barrel, while WTI crude increased by more than 12%, surpassing $75 per barrel. Subsequently, these gains partially retracted. This price surge exhibits classic risk premium characteristics. Furthermore, to prevent potential oil supply shortages resulting from the conflict, OPEC+ has issued a statement announcing an increase in crude oil production by 206,000 barrels per day starting April 2026, aiming to stabilize market expectations.
The rise in international oil prices stems from two primary concerns. First, the conflict is occurring in the Middle East, a major global oil-producing region. With Iran being a significant OPEC producer, markets fear the conflict could disrupt oil supplies and create a supply-demand imbalance. Second, there is apprehension that Iran's closure of the Strait of Hormuz, a crucial transit route for Middle Eastern oil, will drive up oil prices. This could lead to supply chain disruptions, causing price increases for related petrochemical products and potentially fueling inflation.
Iran controls the Strait of Hormuz, a vital chokepoint for global energy transportation. The majority of crude oil and refined products from Middle Eastern oil-producing countries are shipped to global markets through this strait. In 2025, Middle Eastern countries, particularly those in the Persian Gulf, exported over 18.67 million barrels per day of crude and refined products via the Strait of Hormuz, accounting for more than 27% of global volumes. Crude oil and condensate constituted the primary exports, with daily shipments through the strait reaching 15 million barrels, representing 34.5% of the global total.
Consequently, although the Strait of Hormuz is under Iranian control, Iran would typically avoid blocking it unless absolutely necessary. Historically, during periods of war when the strait was blockaded, vessels attempted to ensure safe passage by flying the flags of major powers, yet security remained challenging.
Currently, due to the joint U.S.-Israeli strikes, Iranian authorities have announced the closure of the Strait of Hormuz. While many vessels can reroute, the resulting supply chain disruptions, along with increased shipping and insurance costs, will raise the expenses and final prices of oil products. These higher costs would then propagate through the industrial chain, leading to price increases for petrochemicals, raw materials, industrial goods, and consumer products.
The critical issue now is the duration of the Strait of Hormuz's closure, which is directly tied to the length of the conflict. Once the conflict ends, the strait will likely reopen, and prices for crude oil and refined products should subsequently decline. In 2025, military conflict between the U.S., Israel, and Iran lasted 12 days. Historically, aside from the Iran-Iraq War, conflicts involving external forces have typically not exceeded two weeks, often due to United Nations intervention. Furthermore, in the current scenario, the U.S. is unlikely to commit ground troops deep into Iranian territory. Additionally, both Israel and Iran depleted significant missile stocks during last year's 12-day conflict, and their current inventories are limited. Therefore, the conflict may be short-lived. More importantly, the U.S. objective is not primarily to engage in prolonged warfare with Iran but rather to apply maximum pressure to secure access to Iranian oil resources and dismantle Iran's nuclear capabilities.
Thus, the key factors are the conflict's duration and its subsequent repercussions.
Historical experience suggests that, barring large-scale Middle Eastern wars, oil price spikes triggered by short-term conflicts are typically temporary. As conflicts resolve and supply is restored, international oil prices generally gradually decline. The current price volatility is driven by risk aversion and temporary supply disruptions causing a short-term imbalance between supply and demand. A sustained surge in oil prices leading to an energy crisis is unlikely primarily because global oil demand is actually weakening amid heightened geopolitical conflicts and increased tariff and non-tariff barriers. The fundamental balance of oil supply and demand has not undergone a fundamental shift. The impulse rise in international oil prices is expected to subside once the conflict ceases.
In conclusion, whether oil prices transition from a "short-term spike" to "sustained high levels" or even trigger an energy crisis depends not on the conflict itself, but on its duration, the scope of military action, and how long the Strait of Hormuz remains disrupted. The current oil prices, characterized by significant risk premiums, are likely to gradually decline if the U.S.-Israel-Iran conflict concludes swiftly. However, if the conflict persists and continues to jeopardize the safe passage of the Strait of Hormuz, the impact on the international oil market could be prolonged. This would affect downstream refined products and chemical prices, potentially increasing inflationary pressures in countries like the U.S. and Japan, where inflation persistence is a concern.