War has a price — and the world’s paying it at the pump. Reportedly around February 28, 2026, the United States and Israel launched strikes on Iran, reportedly killing Supreme Leader Ali Khamenei. Iran struck back fast. It attacked U.S. bases, Israel, and Gulf states with missiles and drones. It also blocked the Strait of Hormuz, one of the world’s most important oil shipping routes.
War has a price — and the world is paying it at the pump.
The Strait of Hormuz is a narrow waterway between Iran and Oman. About 20% of the world’s daily oil supply moves through it. When Iran shut it down, oil prices shot up almost immediately. Brent crude, a key global oil price marker, crossed $100 per barrel on March 8, 2026. It then peaked at $126 per barrel. That’s the fastest price surge seen in any recent conflict.
Shipping companies didn’t take chances. Maersk, MSC, Hapag-Lloyd, and CMA CGM reportedly all stopped sending ships through the strait. An estimated 150 or more vessels anchored outside it to wait. By March 12, Iran had attacked roughly 21 merchant ships. Mines were planted in the water. Several ships, including the Safeen Prestige and the Prima, were hit.
Oil production in the region took a serious hit. Saudi Arabia reportedly cut output by 20%. QatarEnergy stopped gas production and declared force majeure, reportedly on March 4. Kuwait, Bahrain, the UAE, and Iraq all followed. Regional oil exports dropped from an estimated 25 million barrels per day to just 10 million by March 15.
Some countries tried to reroute oil. Saudi Arabia used its East-West Pipeline. The UAE used a pipeline to Fujairah. But those pipelines can only carry roughly 3.5 to 5.5 million barrels per day, far less than the 20 million that normally flows through the strait.
The economic damage’s spreading fast. A closure through Q2 2026 could cut global GDP growth by approximately 2.9 percentage points. Japan, South Korea, and India are especially exposed. Iraq’s Deputy Prime Minister reportedly warned that in an extreme case, oil could reach $200 to $300 per barrel. Analysts warn that every US$10/bbl rise in oil prices could widen India’s current account deficit by approximately 0.4 to 0.5 percentage points of GDP. Europe has also felt the pressure, as the continent reportedly sources 12–14% of LNG from Qatar through the strait, making the closure a significant threat to European energy supplies as well.
References
- https://www.mufgresearch.com/fx/india-strait-of-hormuz-closure-not-just-about-oil-prices-for-inr-12-march-2026/
- https://en.wikipedia.org/wiki/2026_Strait_of_Hormuz_crisis
- https://atlasinstitute.org/the-strait-that-moves-the-market-the-2026-strait-of-hormuz-crisis-and-the-anatomy-of-a-global-energy-shock/
- https://www.dallasfed.org/research/economics/2026/0320
- https://unctad.org/publication/strait-hormuz-disruptions-implications-global-trade-and-development
- https://www.youtube.com/watch?v=vKfKIAMbO1E
