As of 3:00 p.m. EDT Wednesday, WTI crude fell to $98.19 per barrel, while Brent traded at $100.84, both dropping about 3% in a single session after soaring 40–50% over the past month.
Energy markets have been highly volatile since February 28, when US and Israeli strikes on Iran triggered retaliatory attacks. Control of the strategically vital Strait of Hormuz quickly became a central concern for Tehran.
Disruptions at the strait and targeted attacks on regional oil and gas infrastructure have caused significant swings in oil prices and supply, with ripple effects on related sectors, including fertilizer production. Approximately 20 million barrels per day (bpd) of oil and petroleum products are impacted by transit interruptions, including around 15 million bpd of crude — exceeding the United States’ crude output of roughly 13 million bpd.
Rising tensions in the Middle East may mark a critical moment for the global energy transition, with experts warning that international oil prices could enter a highly volatile zone, and some regions may face potential supply shortages.
The conflict has caused “monumental disruption” to global energy flows, with markets factoring in sustained risks to the Strait of Hormuz, said Naveen Das, senior crude oil analyst at Kpler, in comments to CGTN.
Simone Tagliapietra, senior fellow at Bruegel, told CMG that the crisis is putting intense pressure on European natural gas markets. Higher energy costs threaten household budgets and could reignite inflationary pressures.
Globally, rising energy prices risk pushing consumer costs higher. In the UK, annual inflation remained at 3% in February, above the Bank of England’s 2% target. Eurostat’s flash estimate showed euro area inflation increased to 1.9% in February 2026, up from 1.7% in January, while the European Central Bank has revised its economic outlook downward.
In Asia, analysts from the NLI Research Institute warned that a prolonged conflict could reduce Japan’s real economic growth by 0.31 percentage points, further aggravating persistent inflation. Meanwhile, the OECD has downgraded South Korea’s 2026 growth forecast to 1.7%, a 0.4-point cut.
In Africa, the African Development Bank (AfDB) noted on Monday that the continent’s growth outlook was already under pressure due to regional instability and global headwinds, even before the Iran tensions. Speaking at the launch of the bank’s 2026 Africa Macroeconomic Report in Abidjan, Chief Economist Kevin Urama emphasized that the economic impact will largely hinge on the conflict’s duration.
The US is also experiencing spillover effects, with some soybean farmers reporting sharply rising costs for agricultural inputs, leaving them uncertain about the future of their operations.
Before the outbreak of hostilities in early 2026, the global economy was on a stronger-than-expected trajectory, with growth forecasts suggesting a potential upward revision of around 0.3 percentage points for 2026. Those positive projections have now been wiped out by the conflict.
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