Global oil prices surged past $114 per barrel on March 9, 2026, the highest level since 2022, as the escalating conflict involving the United States (US), Israel and Iran threatened oil production and shipping routes across West Asia, raising fears of a prolonged global energy supply disruption.
Prices that were hovering between $65.21 and $70.75 per barrel on February 26, 2026, a day before the US and Israel launched joint strikes on Iran, have rapidly climbed toward $120 per barrel. The price of Brent crude, the international benchmark, jumped above $114 after trading resumed, marking roughly a 23 per cent increase from March 6’s closing price of $92.69.
The US benchmark West Texas Intermediate also climbed to around $114 per barrel, about 25 per cent higher than its March 6 close of $90.90.
The surge followed sharp gains last week, when US crude prices jumped 36 per cent and Brent crude rose 28 per cent as the conflict intensified across the region.
A key factor driving the spike is the threat to shipping through the Strait of Hormuz, one of the world’s most strategically important oil transit routes.
Roughly 15 million barrels of crude oil, about 20 per cent of global supply, pass through the strait each day. The waterway connects major oil producers including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
Threats of Iranian missile and drone attacks have already slowed tanker movement through the corridor. As exports decline, Iraq, Kuwait and the UAE have begun reducing oil production as storage tanks fill up. At the same time, attacks on energy infrastructure have intensified supply concerns, with Iran, Israel and the United States targeting oil and gas facilities since the conflict began.
Israeli strikes on oil depots and a petroleum transfer terminal in Tehran early on March 8 killed four people, according to Iranian authorities. Israel’s military said the facilities were being used to fuel Iranian missile launches.
The rapid rise in energy prices has unsettled global financial markets and raised concerns that higher fuel costs could accelerate inflation and weaken economic growth.
US stock index futures fell late March 8, signalling a weaker opening on Wall Street. Futures for the S&P 500 dropped 1.6 per cent, Dow Jones futures fell 1.8 per cent and Nasdaq futures declined 1.5 per cent.
Energy costs in the US have also surged. According to the American Automobile Association, the average price of regular gasoline reached $3.45 per gallon on March 8, about 47 cents higher than a week earlier. Diesel prices climbed to around $4.60 per gallon, up roughly 83 cents over the same period.
US Energy Secretary Chris Wright said the spike could prove temporary, suggesting the surge may last only a short period.
Natural gas prices have also climbed, though less sharply than oil. Gas traded at around $3.33 per 1,000 cubic feet late March 8, about 4.6 per cent higher than the March 6 closing price of $3.19 after rising roughly 11 per cent during the week.
Spot liquefied natural gas prices have also increased amid concerns that supplies from Qatar, one of the world’s largest LNG exporters, could be disrupted.
Iran exports around 1.6 million barrels of oil per day, largely to China. Analysts say any disruption to those exports could force major buyers to seek alternative suppliers, adding further pressure on global energy markets.
Several Asian governments have begun taking emergency measures to limit the economic impact of rising energy costs.
South Korea has announced plans to cap domestic fuel prices for the first time in nearly three decades. President Lee Jae Myung said authorities are also exploring alternative energy supplies outside routes passing through the Strait of Hormuz.
In Japan, authorities have instructed national oil reserve facilities to prepare for a potential release of crude from strategic reserves. Vietnam is planning to temporarily remove import tariffs on fuels, while Bangladesh has announced measures including early holidays at universities to reduce electricity consumption.
G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, along with the European Union) finance ministers are set to discuss a coordinated release of emergency oil reserves after the war between Iran and the US-Israel alliance pushed crude prices above $100 a barrel for the first time since 2022. According to a report by the Financial Times, the talks will take place in a call coordinated by the International Energy Agency (IEA), which manages emergency petroleum stockpiles among its 32 member countries.
So far, three G7 countries, including the US, have reportedly supported releasing reserves. US officials are said to favour a joint release of 300-400 million barrels, roughly 25-35 per cent of the 1.2 billion barrels held in strategic reserves across IEA member states.
The proposal comes as oil markets react to escalating conflict involving Iran, which has raised concerns about supply disruptions in the Middle East.
India has invoked emergency powers and directed refiners to maximise production of liquefied petroleum gas (LPG) to prevent shortages of cooking fuel amid supply disruptions linked to the West Asia crisis.
According to the finance ministry’s February Monthly Economic Review prepared by the Department of Economic Affairs, rising geopolitical tensions in West Asia pose fresh risks to India’s economy by raising inflation and increasing the country’s import bill.
India is particularly exposed to disruptions in the Strait of Hormuz because a large share of its crude oil and liquefied natural gas imports pass through the corridor. The country sources roughly 59 per cent of its LNG imports from Qatar and the United Arab Emirates.
Meanwhile, the government is also preparing a broader energy security strategy aimed at strengthening long-term resilience against global supply shocks. The proposed framework focuses on expanding crude oil reserves, boosting domestic exploration and increasing refining capacity to support domestic production and energy infrastructure.
As part of the policy roadmap, authorities are considering expanding the country’s strategic petroleum reserves by an additional 6 million tonnes (MT). The goal is to gradually move toward an emergency buffer capable of covering about 90 days of national consumption, in line with global energy security norms followed by members of the IEA.
India currently maintains about 5.33 MT of strategic crude reserves, equivalent to roughly 10 days of imports. However, when combined with reserves held by domestic refineries and additional storage facilities under development, the country’s total oil cover is estimated at around 80 days. And the country currently has reserves for about a few weeks. Expanding strategic storage capacity is intended to strengthen preparedness against supply disruptions and stabilise domestic fuel markets during periods of global volatility.
The current turmoil has revived comparisons with earlier oil shocks that reshaped the global energy system.
The 1973 Oil Crisis, triggered when Arab members of the Organization of the Petroleum Exporting Countries imposed an oil embargo during the Yom Kippur War, removed roughly 7-9 per cent of global supply and caused prices to quadruple.
A second shock followed the Iranian Revolution in 1979 and the Iran-Iraq War, which together cut global oil production by several million barrels per day and pushed prices above $35 per barrel.
These crises triggered widespread inflation and economic stagnation across advanced economies and forced governments to rethink their dependence on imported oil.
The oil shocks of the 1970s and early 1980s fundamentally transformed global energy markets by ending the era of cheap oil and forcing countries to diversify supply sources and improve efficiency.
Industrialised nations created the IEA in 1974 to coordinate responses to supply disruptions and established large strategic petroleum reserves to cushion future shocks.
High prices also encouraged new oil production outside traditional OPEC regions, particularly in the North Sea, Alaska and Mexico, while governments promoted energy conservation, stricter fuel-efficiency standards and early investments in alternative energy technologies.
By the mid-1980s, rising non-OPEC production combined with reduced demand from more efficient economies created a major supply surplus. The resulting 1986 oil price collapse pushed crude prices below $10 per barrel, ending the crisis cycle but permanently reshaping global energy policy.
Amid mounting volatility, the OPEC+ alliance has scheduled emergency discussions to consider deploying about 3.5 million barrels per day of spare production capacity to stabilise global markets.
Analysts warn that if the conflict escalates further or leads to a sustained disruption of shipping routes in the Gulf, oil prices could climb even higher, intensifying inflationary pressures and slowing economic growth worldwide.
Energy experts say that while geopolitical conflicts can trigger sudden oil price spikes, governments have a range of policy tools to prevent supply disruptions from evolving into prolonged global energy crises.
Institutions such as the IEA note that countries typically respond through a combination of short-term market stabilisation measures and long-term structural changes in energy systems. These include coordinated releases of strategic petroleum reserves, demand restraint policies and increased production from spare capacity among major oil producers.
In the immediate term, governments may release crude from emergency reserves to calm markets and offset temporary supply shortages. According to the International Energy Agency’s oil security framework, member countries are required to maintain emergency stocks equivalent to at least 90 days of net oil imports to cushion supply shocks.
Maintaining open and secure shipping routes is also critical. Energy analysts warn that disruptions to major maritime chokepoints such as the Strait of Hormuz, through which roughly one-fifth of global oil supply passes, can quickly destabilise global markets.
Over the longer term, economists argue that reducing structural dependence on oil is key to limiting the economic impact of future shocks. Research from the Organisation for Economic Co-operation and Development highlights the importance of diversifying supply sources, improving energy efficiency in transport and industry, and accelerating the development of alternative energy systems.
Energy analysts note that the oil shocks of the 1970s ultimately triggered major shifts in global energy policy, including the creation of the IEA, the expansion of strategic petroleum reserves and increased investments in energy efficiency and alternative fuels: changes that helped reduce vulnerability to future supply disruptions.
According to institutions like IEA, countries typically respond to oil crises through a mix of short-term supply stabilisation measures such as releasing strategic reserves and longer-term strategies including diversifying supply sources, improving energy efficiency and accelerating the transition to alternative energy systems.
As geopolitical tensions continue to reshape global energy markets, experts say similar structural adjustments may again play a critical role in stabilising oil markets and strengthening long-term energy security.