Rising Oil Prices Amid Escalating Iran Conflict

Oil prices have significantly increased due to escalating tensions in the Iran conflict, particularly following missile attacks by Iran-backed Houthis on Israel and aggressive rhetoric from President Donald Trump. As of Monday, May contracts for Brent crude were trading at approximately $114 per barrel, while West Texas Intermediate (WTI) reached around $102 per barrel. This surge is attributed to fears of prolonged conflict and disruptions in oil supply, particularly through the critical Strait of Hormuz, which handles about 20% of the world's oil supply.

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The conflict began on February 28, 2026, when the U.S. and Israel initiated airstrikes against Iran. In retaliation, Iran has effectively closed the Strait of Hormuz, exacerbating global oil supply issues. The International Energy Agency has responded by releasing 400 million barrels from strategic reserves to mitigate economic uncertainty. The ongoing conflict has led to a 70% increase in oil and gas prices, raising concerns of an energy crisis reminiscent of the 1970s.

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President Trump has indicated that the U.S. military operations in Iran could conclude within two to three weeks, asserting that the objectives of destroying Iran's missile capabilities and naval forces are being met. However, he has also suggested that if negotiations fail, the U.S. may take more aggressive actions, including targeting Iranian oil infrastructure. Meanwhile, the European Commission has urged citizens to conserve fuel and accelerate the transition to renewable energy in anticipation of a prolonged crisis.

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Critics, including Senate Minority Whip Richard Durbin, have expressed concerns that the conflict is adversely affecting American consumers, particularly as gas prices have surged to an average of $4.064 per gallon, up from $2.984 a month prior. Polls indicate that a majority of Americans disapprove of Trump's handling of the situation, with many attributing rising gas prices to the ongoing war. GOP strategist Ford O'Connell emphasized the urgency for the administration to reduce gas prices before the summer travel season, warning that sustained high prices could have significant political repercussions.

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While Trump has projected confidence in a swift resolution to the conflict, analysts remain skeptical. Market experts note that the situation is evolving, with the potential for further escalation as the Houthis threaten shipping lanes and energy infrastructure. The Pentagon is reportedly preparing for extended ground operations in Iran, raising questions about the timeline for de-escalation and the long-term economic implications.

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As the conflict continues, Trump is scheduled to address the nation, likely reiterating his administration's stance on the war and its economic impacts. The upcoming weeks will be critical in determining both the military and economic trajectory of the situation, as rising oil prices and public discontent could influence political dynamics ahead of the midterm elections.

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• “Even if … peace is here tomorrow, still we will not go back to normal in the foreseeable future,” — Dan Jorgensen, EU Energy Chief

Iran war: EU urges citizens to save on fuel as 'long crisis' looms

• “The perception of what people think is happening is something the president and the Republicans have to be very mindful of.” — Ford O'Connell, GOP Strategist

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• “President Trump’s war with Iran is costing Americans at home, and endangering our service members abroad,” — Richard J. Durbin, Senate Minority Whip

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• “Market nervousness around the situation in the Middle East continues to ratchet up as the Iran conflict enters a fifth week,” — Danni Hewson, AJ Bell's Head of Financial Analysis

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