March 1, 2026 — Updated March 1, 2026
Oil prices jumped sharply Sunday after U.S. and Israeli strikes on Iran, in an escalation that killed Iran’s supreme leader. U.S. crude initially climbed more than 10%, while Brent, the global benchmark, rose as much as 13% when markets opened. The gains eased after a few hours but both benchmarks remained up by more than 5% late Sunday night, with U.S. crude trading over $3 higher per barrel.
Markets had already pushed oil about 17% higher so far this year amid tougher U.S. sanctions and heightened rhetoric from President Donald Trump toward Iran. That earlier run-up set the stage for a stronger reaction to weekend events.
Retail gasoline typically moves roughly 2.5 cents for every $1 change in crude oil, so the recent crude rally could translate into about a 10-cent-per-gallon increase at the pump, analysts say. GasBuddy senior petroleum analyst Patrick De Haan warned consumers could see the impact quickly: “By Monday night, you could credibly say that gas prices are being impacted by oil prices having gone up,” he said, adding that the change is likely to be gradual rather than a sudden spike as stations pass along higher costs this week.
Iran accounts for under 5% of global oil output, and much of its exports go to China because of U.S. sanctions. Still, Tehran’s position near the Strait of Hormuz gives it outsized leverage: more than 20% of the world’s daily oil demand flows through that chokepoint. A closure or restrictions there would throw markets into turmoil, said longtime analyst Andy Lipow. Over the weekend, at least six major ship operators said they were halting or diverting vessels scheduled to transit the strait.
“Historically, geopolitical oil shocks fade quickly, but if this episode lasts longer, markets may see extended volatility,” wrote Luis Costa, Citigroup’s global head of emerging markets strategy.
Equities and safe-haven assets reflected investors’ jitters. S&P 500 futures fell nearly 0.8%, Nasdaq 100 futures dropped about 1%, and Dow futures were down more than 400 points. Russell 2000 futures slipped over 1.1%. The U.S. Dollar Index ticked up about 0.3%, while gold jumped nearly 2.5%, a rise of more than $120 an ounce, as traders sought safer assets. “The scale [of Iran’s retaliation] has been a big, big surprise,” Jorge León of Rystad Energy said.
In an attempt to steady markets, eight OPEC+ members announced plans to increase production by more than 200,000 barrels per day starting next month. Still, analysts at JPMorgan said the near-term path for crude will hinge on four things: how much supply is actually disrupted, how long any disruption lasts, whether alternative supplies can be mobilized quickly, and how geopolitical developments unfold next.
The ripple effects may extend beyond oil. Lipow noted that tanker movements around Qatar, the world’s second-largest LNG exporter, have already been affected, and a disturbance in LNG flows could push natural gas prices higher—particularly in Europe. Natural gas futures were up about 2% in evening trading.