March 1, 2026 / 7:03 PM EST / CBS/AP
Oil prices climbed sharply late Sunday after U.S. and Israeli strikes on Iran and subsequent retaliatory attacks against Israel and U.S. military sites around the Gulf disrupted the flow of crude. Traders bet that shipments from Iran and other Middle Eastern producers could slow or stop, pushing prices higher.
The attacks included strikes on two vessels transiting the Strait of Hormuz, raising concern about countries’ ability to export oil. The Strait of Hormuz, the narrow entrance to the Persian Gulf, is the world’s most important oil chokepoint. About 15 million barrels per day, roughly 20% of global oil, pass through the strait, Rystad Energy says. Tankers there carry crude 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 near $72 a barrel Sunday night, up about 8% from roughly $67 on Friday.
Iran had temporarily closed parts of the strait in mid-February for military drills, and further disruptions would tighten supply and lift prices. Shipping companies may reroute vessels to avoid the area and insurers could raise premiums, both of which raise transport costs that filter through to consumers.
Against that backdrop, eight OPEC+ members said Sunday they will increase crude production. In a meeting arranged before the recent escalation, OPEC announced a planned boost of 206,000 barrels per day in April, more than many analysts had expected. The producers adding output include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
Jorge León, Rystad’s senior vice president and head of geopolitical analysis, said markets worry less about theoretical spare capacity and more about whether barrels can actually move. If flows through the Gulf are constrained, extra production will provide limited immediate relief, making access to export routes more critical than headline output figures.
Iran exports about 1.6 million barrels a day, mostly to China. Disruption of those shipments would force buyers to seek alternate sources, putting additional upward pressure on prices.
CBS News MoneyWatch correspondent Kelly O’Grady described the situation as a straightforward supply-and-demand problem. She noted that measures to block the Strait of Hormuz would also harm Iran, since much of its revenue comes from sales to buyers like China. While a complete shutdown is considered an unlikely extreme, the risk prompts insurers and shippers to avoid the route, raising costs and, ultimately, pump prices for consumers.