Oil tops $114 a barrel as Iran conflict drives record monthly surge
The rally comes as the conflict between the United States, Israel, and Iran enters its fifth week with no clear resolution in sight
Brent crude, the European benchmark, closed Monday at $112.78 per barrel and continued climbing in the futures market past $114, its highest level since July 2022. Oil has surged roughly 55% in March, the largest monthly gain since the contract’s inception in 1988.
The rally comes as the conflict between the United States, Israel, and Iran enters its fifth week with no clear resolution in sight. The near-total halt of maritime traffic through the Strait of Hormuz — through which roughly 20% of the world’s oil flows — has caused a severe contraction in global supply.
President Donald Trump said Monday there had been great progress in talks with Tehran, but warned that if a deal is not reached, he would order strikes on Iranian energy infrastructure, including Kharg Island, through which 90% of Iran’s crude exports flow. In an interview with the Financial Times, Trump declared bluntly that what he would like most is to take Iran’s oil.
The entry of Yemen’s Houthis into the conflict has opened a new front of instability. Their weekend launch of ballistic missiles against Israel threatens transit through the Bab el-Mandeb Strait, the southern gateway to the Red Sea and an alternative route Saudi Arabia had been using to partially offset the Hormuz closure. Saudi exports through the port of Yanbu doubled in the past two weeks, reaching seven million barrels per day — the route’s maximum capacity — but far short of the 15 million barrels no longer flowing through the Persian Gulf.
JP Morgan analysts warned that the simultaneous exposure of both energy corridors reduces rerouting options and could add roughly $20 per barrel to oil prices. U.S. benchmark West Texas Intermediate has gained about 50% this month, while Europe’s TTF natural gas benchmark has spiked more than 70% in March.
Nathan Sheets, Citi’s global chief economist, projects world GDP growth at 2.7% in 2026 but acknowledges that if crude prices remain persistently above $100, global growth could shrink by a full percentage point and inflation could rise by two points, according to AFP. Société Générale considers the $150-per-barrel threshold achievable, and Macquarie points even higher, to $200 in the most extreme scenario.
