March 1, 2026 / 7:03 PM EST / CBS/AP
Oil prices rose sharply when market trading began late Sunday as U.S. and Israeli attacks on Iran and retaliatory strikes against Israel and U.S. military installations around the Gulf disrupted the global energy supply chain. Traders bet that oil flows from Iran and elsewhere in the Middle East could slow or halt, pushing prices higher.
Attacks across the region, including strikes on two vessels transiting the Strait of Hormuz, threatened countries’ ability to export oil. The Strait of Hormuz — the narrow mouth of the Persian Gulf — is the world’s most critical oil chokepoint. Roughly 15 million barrels per day, about 20% of global oil, pass through it, Rystad Energy says. Tankers there carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.
West Texas Intermediate, the U.S. benchmark for light, sweet crude, was trading around $72 a barrel Sunday night, up about 8% from roughly $67 on Friday.
Iran temporarily closed parts of the strait in mid-February citing military drills; further disruptions could lower supply and lift prices. Shipping companies may avoid the area and insurers could raise premiums, both of which would raise costs that flow through to consumers.
Against that backdrop, eight OPEC+ countries announced Sunday they would boost crude production. In a meeting planned before the conflict escalated, OPEC said it would increase production by 206,000 barrels per day in April — more than analysts expected. The producers increasing output include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
“Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” Jorge León, Rystad’s senior vice president and head of geopolitical analysis, said in an email. “If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets.”
Iran exports roughly 1.6 million barrels a day, mostly to China. If Iran’s exports are disrupted, buyers may look elsewhere, adding upward pressure on prices.
CBS News MoneyWatch correspondent Kelly O’Grady said the situation is “a really supply-and-demand, simple economics equation.” She noted that any action to block the Strait of Hormuz would harm Iran as well: much of Iran’s revenue depends on oil sales to buyers like China. “If they cut that off for other countries and other buyers, they’re also doing that to themselves,” she said, adding that while a complete shutdown is seen as an unlikely extreme, the risk drives insurers and shippers to avoid the route, which raises costs and pushes up oil and gasoline prices.