March 1, 2026, 6:24 PM EST / Updated March 1, 2026, 10:40 PM EST
The price of oil surged Sunday after U.S. and Israeli strikes on Iran, which killed its supreme leader.
U.S. crude initially soared more than 10%, while Brent, the international benchmark, jumped as much as 13% when trading opened on Sunday. The rally moderated after a few hours but both were still up more than 5% as of 10:20 p.m. ET. For U.S. crude, the move pushed prices higher by more than $3 per barrel.
Even before the weekend’s escalation, oil had risen 17% this year amid President Donald Trump’s heightened rhetoric against Iran and added sanctions.
Retail gas prices typically move about 2.5 cents for every $1 change in crude oil, meaning consumers could see roughly a 10-cent-per-gallon increase. GasBuddy analyst Patrick De Haan said price hikes at the pump could start as soon as Monday. “I fully expect that by Monday night, you could credibly say that gas prices are being impacted by oil prices having gone up,” he said. “It won’t be a spike,” De Haan added, but stations will likely begin passing along higher prices this week.
Iran’s oil production is estimated at under 5% of global output, much of which goes to China because of U.S. sanctions. Still, Iran wields major influence over the Strait of Hormuz, a chokepoint for more than 20% of the world’s daily oil demand. A closure or restriction there could quickly roil global markets and would be among the worst-case scenarios, longtime analyst Andy Lipow said. Over the weekend, at least six leading cargo shipping companies said they were halting or diverting ships scheduled to transit the strait.
“Historically, geopolitical oil shocks fade quickly, but if this episode lasts longer, markets may see extended volatility,” Luis Costa, Citigroup’s global head of emerging markets strategy, wrote Sunday night.
Stock futures fell sharply: S&P 500 futures dropped nearly 0.8%, Nasdaq 100 futures slid about 1%, and Dow futures fell more than 400 points. Russell 2000 futures declined more than 1.1%. The U.S. Dollar Index rose 0.3%, and investors moved into safe-haven assets, with gold jumping nearly 2.5% — more than $120. “The scale [of Iran’s retaliation] has been a big, big surprise,” Jorge León of Rystad Energy said.
In an attempt to calm markets, eight OPEC+ nations said they plan to boost production by more than 200,000 barrels per day starting next month. For prices to retreat, tensions likely need to ease. JPMorgan analysts said oil’s trajectory will depend on four factors: how much supply is disrupted, how long disruptions last, whether other supplies can be mobilized quickly, and what happens next.
Crude may not be the only commodity affected. Lipow noted that Qatar, the world’s second-largest LNG exporter behind the U.S., has seen tankers diverted away from the region. A disruption in LNG flows would push natural gas prices higher, especially in Europe. Natural gas prices rose about 2% in evening trading.