Quick Read
- US and Israel launched coordinated military strikes across Iran early Saturday, February 28, 2026.
- Benchmark oil prices, including WTI and Brent, had already risen significantly on Friday due to escalating tensions and nuclear talks.
- The Strait of Hormuz, vital for 20% of global oil supply, is now considered a ‘war zone,’ raising concerns about supply disruptions.
- Analysts expect a substantial ‘war premium’ to be added to crude prices when markets open on Monday.
- UAE and Saudi Arabia are reportedly increasing oil production to mitigate potential supply impacts.
NEW YORK (Azat TV) – Global oil markets are bracing for significant volatility and a sharp increase in crude prices following coordinated military strikes launched by the United States and Israel across Iran early Saturday morning. The unprecedented assault, which targeted multiple Iranian cities including the capital Tehran, marks a dramatic escalation of regional tensions that had already pushed benchmark oil prices higher on Friday, with U.S. West Texas Intermediate (WTI) crude settling at $67.02 per barrel and Brent crude at $72.48.
The military action follows weeks of intensifying geopolitical friction and inconclusive nuclear negotiations between the United States and Iran. Analysts are now predicting a substantial “war premium” to be factored into crude prices when markets open on Monday, signaling a direct and immediate impact on global economic stability and investment decisions across various sectors.
Escalating Tensions Drive Oil Price Surge
The recent surge in oil prices culminated on Friday, February 27, 2026, as traders reacted to ongoing uncertainty surrounding the U.S.-Iran nuclear talks and the looming threat of military confrontation. U.S. West Texas Intermediate crude rose 2.8% to settle at $67.02, while Brent crude, the international standard, advanced 2.4% to $72.48 per barrel, according to reports from The Associated Press and CNBC. This upward movement was largely driven by what analysts described as ‘weekend risk’ and growing speculation that an attack on Iran’s nuclear infrastructure was becoming increasingly likely.
Prior to the strikes, U.S. President Donald Trump had issued an ultimatum on February 19, stating that Iran must agree to a deal over its nuclear program within 10 to 15 days or face ‘really bad things.’ Indirect talks held in Geneva on Thursday, February 26, yielded little progress, with U.S. insistence on zero uranium enrichment by Iran reportedly stalling discussions. Tamas Varga, an oil analyst at brokerage PVM, noted that ‘uncertainty prevails, fear is pushing prices higher today,’ directly linking the market’s anxiety to the outcome of these talks and potential military action.
Military Action and Global Supply Concerns
The coordinated military strikes, confirmed by Israeli Defense Minister Israel Katz as a ‘preemptive strike,’ involved attack planes from regional bases and aircraft carriers, according to U.S. officials cited by Oilprice.com. Explosions were reported in key Iranian cities such as Isfahan, Qom, and Karaj, with witnesses in Tehran observing thick smoke rising from districts housing government buildings. This operation is significantly more extensive than previous U.S. strikes on Iranian soil, which included the bombing of three nuclear sites in June 2025.
A critical concern for global oil supply is the Strait of Hormuz, a narrow waterway through which approximately 20% of the world’s oil supply passes. With the region now effectively designated a war zone, the potential for severe disruption to tanker traffic and crude exports is extremely high. Ahead of the strikes, satellite imagery and shipping data had already indicated an unusual surge in tanker activity at Iranian terminals throughout the week, as Tehran reportedly sought to maximize revenue and clear storage facilities in anticipation of potential infrastructure damage or stricter maritime blockades.
Analyst Outlook: The ‘War Premium’
Energy analysts had been closely monitoring the situation, with many anticipating a significant market reaction. Phil Flynn, a senior market analyst at PRICE Futures Group, told Rigzone that oil was up on Friday due to ‘growing speculation that an attack on Iran’s nuclear infrastructure won’t be avoided.’ Eli Rubin, an Energy Analyst at EBW Analytics Group, added that ‘risks with Iran are rising after inconclusive negotiations yesterday, with fewer traders willing to be short ahead of the weekend.’
The consensus among experts is that the direct military engagement will translate into a substantial ‘war premium’ on crude prices. While some scenarios outlined by Skandinaviska Enskilda Banken AB (SEB) analysts had previously ranged from $55 to $150 per barrel, the current escalation strongly favors the higher end of such forecasts. This could have profound implications for consumers and businesses globally, impacting transportation costs, manufacturing expenses, and overall economic growth.
Broader Economic Repercussions
The immediate aftermath of the strikes has seen Israel close its airspace and suspend civilian flights, with the Home Front Command ordering the public to cease non-essential activities. In Iran, the strikes occurred on a Saturday morning, leading to reports of chaos as millions were already in offices and classrooms. The instability extends beyond the immediate conflict zone, influencing global financial markets. On Friday, U.S. stocks sank, partly due to broader worries about inflation and the geopolitical tensions, with the S&P 500 falling 0.4% and the Dow Jones Industrial Average dropping 1.1%.
In an effort to mitigate the impact of potential supply disruptions, major oil producers are reportedly taking steps. UAE oil producer Abu Dhabi is expected to export more of its flagship Murban crude in April, and Saudi Arabia may raise April crude prices to Asia to meet higher demand from India, which is seeking to replace Russian supplies. However, these measures may only partially offset the impact of a sustained disruption in the Middle East.
The escalation of hostilities between the United States, Israel, and Iran represents a critical juncture for global energy markets, threatening to destabilize an already volatile supply chain and inject significant uncertainty into the world economy. The sustained rise in oil prices, driven by this geopolitical conflict, will inevitably translate into higher costs for consumers and businesses, posing a challenge for policymakers striving to maintain economic stability.