US-Iran war: Oil prices extended gains to a third straight session on Tuesday, March 3, as the escalating conflict between the US and Israel with Iran, along with threats to shipping via the Strait of Hormuz, which stoked concerns over potential supply disruptions from the crucial Middle East oil-producing region.
Brent crude futures climbed to $79.44 per barrel, up $1.70 or 2.2%. On Monday, the benchmark had surged to an intraday high of $82.37 — its strongest level since January 2025 — before trimming gains to close 6.7% higher.
Meanwhile, US West Texas Intermediate (WTI) crude advanced $1.17, or 1.6%, to $72.40 per barrel. In the previous session, WTI had briefly touched its highest level since June 2025 before retreating, though it still ended the day with a solid 6.3% gain.
What’s driving crude oil prices?
The US and Israel’s war against Iran escalated on Monday, with Israel launching strikes on Lebanon and Iran retaliating by targeting energy infrastructure in Gulf nations and attacking tankers in the Strait of Hormuz.
Several tankers and container vessels are steering clear of the crucial waterway after insurers withdrew coverage, pushing global oil and gas freight rates sharply higher, according to a reuters report.
Tensions intensified further after Iranian media reported that a senior official of the Islamic Revolutionary Guards Corps, as quoted by reutersclaimed the Strait of Hormuz had been closed and warned that Iran would open fire on any vessel attempting to cross.
Nearly 20% of the world’s oil and gas supplies transit through the Strait of Hormuz, underscoring the global significance of the route.
Israeli Prime Minister Benjamin Netanyahu said on Monday that the US and Israel’s war with Iran could take “some time” to play out, but he does not expect it to stretch on for years.
On Monday, Saudi Arabia shut operations at its largest domestic oil refinery after a drone attack.
Can crude oil prices climb to $100/bbl?
Analysts believe rising geopolitical tensions in the Middle East are likely to keep oil prices elevated in the near term, as markets focus on the potential disruption to crude supply from the escalation of the conflict.
Brokerage firm Emkay Global said in a report that it expects severe dislocation of oil supplies and global supply chains amid the ongoing tension in the Middle East. It further noted that the Brent crude prices could rally to $90-$100 per barrel.
“Though Iran’s response in attacking other GCC countries escalated the seriousness, we expect a relatively short conflict lasting a few days to a couple of weeks, given the imbalance between the two sides and the depletion of Iran’s leadership. In the short term, we expect severe dislocation of oil supplies and global supply chains, with a spike in Brent crude prices to USD90-100/bbl,” the firm said.
Meanwhile, brokerage firm JM Financial also said that the current scenario analysis suggests that Hormuz disruption could push crude prices above $90/bbl, and a broader regional war could drive crude beyond $100/bbl.
It further noted, “Brent crude had already risen to a 7-month high of ~USD 72.8/bbl following the strike fears. Scenario analysis suggests limited retaliation could add USD 5–10/bbl; direct damage to Iranian oil infrastructure could add USD 10–12/bbl.”
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