Middle East War Drives Brent Crude Toward $120 Per Barrel

A U.S.-Israeli war against Iran, initiated by airstrikes on February 28, has triggered the largest supply disruption in the history of the global oil market. The conflict effectively shut the Strait of Hormuz, a critical transit point for one-fifth of global oil and gas supplies, and damaged energy infrastructure across the region. The International Energy Agency reported production cuts from Saudi Arabia, Kuwait, Qatar, Iraq, and the United Arab Emirates totaling at least 10 million barrels per day.

Market volatility pushed Brent crude futures toward $120 per barrel, hitting $119.50 on Monday. Goldman Sachs responded by raising its average price forecast to over $100 per barrel for March and $85 for April. The bank warned that a two-month closure of the Strait of Hormuz could drive fourth-quarter averages to $93 per barrel, though it expects prices to eventually ease to the low $70s later in the year.

To stabilize markets, the International Energy Agency coordinated the release of 400 million barrels of oil stocks, and the United States issued a one-month waiver for Russian oil sales from floating storage. In response to the global instability, the Tema Oil Refinery in Ghana asserted its ability to refine domestic light sweet crude to reduce reliance on imported fuel and strengthen national energy security.