By Boluwatife Oshadiya | March 23, 2026
Key Points
- Brent crude rises above $108 per barrel amid escalating U.S.-Iran tensions
- Donald Trump issues 48-hour ultimatum over Strait of Hormuz reopening
- Markets price in supply disruption risks as Middle East conflict deepens
Main Story
Global oil prices climbed sharply on Monday after U.S. President Donald Trump threatened military strikes on Iran’s energy infrastructure, intensifying fears of supply disruptions through the Strait of Hormuz.
Brent crude, the international oil benchmark, rose 2.2% to $108.71 per barrel, while U.S. West Texas Intermediate (WTI) gained 2.3% to trade at $100.48 per barrel. The rally follows heightened geopolitical risk tied to the ongoing U.S.-Israeli military campaign against Iran, now entering its fourth week.
Trump over the weekend reiterated a 48-hour ultimatum first issued on March 21, warning that the U.S. would “obliterate Iranian power plants, starting with the biggest one” if Tehran fails to fully reopen the Strait of Hormuz—a strategic waterway responsible for roughly 20% of global oil flows.
In parallel, U.S. military planners are reportedly considering a ground operation targeting Kharg Island, Iran’s primary oil export hub, which handles about 90% of the country’s crude shipments. Deployment of U.S. Marines and naval forces to the Middle East has accelerated in anticipation of potential escalation.
Iran has responded with warnings of retaliatory strikes on U.S. and allied energy infrastructure across the region, including threats to fully shut down the Strait of Hormuz if its power facilities are attacked.
The Issues
The current escalation underscores the fragility of global energy supply chains, particularly the outsized role of the Strait of Hormuz as a critical chokepoint. Any disruption—even temporary—can trigger immediate price spikes due to constrained spare production capacity globally.
Additionally, the situation highlights the geopolitical risk premium embedded in oil markets. Since 2022, energy markets have remained highly sensitive to conflict in key producing regions, with limited buffer from strategic reserves following previous supply shocks.
There is also the structural issue of global dependence on Middle Eastern oil exports. Despite diversification efforts, Asia and parts of Europe remain heavily reliant on Gulf crude, amplifying the global economic fallout from any sustained disruption.
What’s Being Said
“A prolonged closure of the Strait of Hormuz would have severe implications for global oil markets, potentially driving prices significantly higher,” analysts at Fitch Ratings said in a note.
“If the strait remains closed for six months, Brent crude could average $120 per barrel in 2026,” the agency added.
Iranian officials have also warned that “any attack on our energy infrastructure will be met with a decisive response targeting regional energy assets,” according to state-backed statements.
What’s Next
- The 48-hour U.S. deadline on Iran’s reopening of the Strait of Hormuz is expected to expire midweek
- Military developments around Kharg Island could determine immediate market direction
- Oil traders will closely monitor shipping activity and insurance premiums in the Gulf region
The Bottom Line: Oil markets are no longer reacting to fundamentals alone — geopolitical risk has become the dominant price driver. Any disruption in the Strait of Hormuz could trigger a sustained rally well above $120, with global inflationary consequences.
