Oil prices whipped from their highest price since 2022 back below $100 US per barrel during a volatile day for markets as the U.S. and Israel’s war on Iran threatened production and shipping in the Middle East and strained energy supplies worldwide.
The price of Brent crude, the international standard, surged to $119.50 US per barrel early in the day — its highest level since the summer after Russia invaded Ukraine in 2022. But it suddenly fell to under $90 US around 3:30 p.m. ET.
West Texas intermediate, the light, sweet crude oil produced in the United States, also soared above $119.48 US per barrel at one point before dropping around the same time.
But that’s still higher than the roughly $70 a barrel crude was selling for before the U.S. and Israel launched the war against Iran on Feb. 28.
The conflict, now in its second week, is ensnaring countries and infrastructure critical to the production and transportation of oil and gas worldwide. And there’s no end in sight.
On Monday, Iran named the hardline Mojtaba Khamenei to succeed his late father as supreme leader — a new sign of defiance from the country’s leaders as the U.S. and Israel continue heavy bombardment.
Fears of attacks have all but stopped tanker traffic in the Strait of Hormuz, a narrow waterway off Iran’s coast where a fifth of the world’s oil sails through on a typical day.
The threat of Iranian missile and drone attacks has all but stopped tankers carrying oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran from travelling through the strait, which is bordered in the north by Iran.
Major oil producers in the region, like Iraq, Kuwait and the U.A.E., have cut production as storage tanks fill due to the reduced ability to export crude. Iran, Israel and the United States also have attacked oil and gas facilities since the war started, worsening supply concerns.
“In economic terms, this is already the largest oil supply shock ever,” said Nicholas Mulder, an assitant professor of history who studies the economic impacts of wars at Cornell University in Ithaca, N.Y.
March 8, 2026 | Iran names Mojtaba Khamenei as supreme leader and black clouds fill the skies over Tehran after strikes on fuel storage sites. Carney announces the date of three crucial byelections that could give Liberals a majority. And B.C. moves the clocks ahead for the last time.
As Gulf producers reduce output and shut down production, he explained, “we are seeing roughly three to four times as many barrels of oil lost as during the 1973 and 1979 oil crises.”
The war’s toll on civilian targets and the energy sector grew over the weekend, notably as oil depots in Tehran smoldered following overnight strikes by Israel. Meanwhile, across the Persian gulf, Bahrain accused Iran of striking a desalination plant vital to drinking water supplies.
Bahrain’s national oil company declared force majeure for its shipments after an Iranian attack set its refinery complex ablaze. The legal declaration releases the company of contractual obligations because of extraordinary circumstances.
“Do not discount the severity of this escalation. Even if, just say, Trump comes in and calms the market, the impact of this I think will last for years to come,” said June Goh, senior oil market analyst for Sparta Commodities, during an interview with CBC News on Sunday evening.
“There will be a reshuffling of strategy from many Asian players, there will be need for diversification and obviously Canada will be well-poised to be there,” she said.
G7 opts not to release oil reserves for now
Some energy experts warn of drawn-out ramifications.
Jim Burkhard, vice-president and global head of crude oil research at S&P Global Energy, pointed particularly to rising production cuts and storage constraints — noting that the crisis had evolved past a solely transporation issue, and restoring outputs will be “a massive technical exercise that could last weeks or more.”
And even higher oil prices could arrive in the near future. If the Strait of Hormuz, in particular, remains closed for only a few weeks, oil and gas strategists at Macquarie Research said the price of crude could push to a $150 US per barrel or higher. That would top previous peaks of around $147 US reached just ahead of the 2008 financial crisis.
Others, however, expect disruptions to be more short-lived. Oxford Economics researchers predict prices will fall to an average of $80 US a barrel for the quarter, but noted Monday that the “risk of a more prolonged crisis has clearly increased.”
In response to soaring prices, there has also been discussions of dipping into emergency oil stockpiles in the U.S. and elsewhere. But on Monday, the Group of Seven (G7) major industrialized powers said it had decided against using their strategic reserves, at least for now.
“We’re not there yet,” said Minister Roland Lescure in Brussels after chairing a meeting of his G7 counterparts. “We are ready to take necessary and coordinated steps in order to stabilize markets, such as strategic stockpiling.”
On Saturday, U.S. President Donald Trump downplayed the idea of turning to America’s Strategic Petroleum Reserve, saying U.S. supplies were ample and prices would soon fall.
High gas prices rocking Asian economies
Yet the surge in costs for oil and natural gas is pushing fuel prices higher, cascading through other industries and jolting Asian economies that are especially vulnerable due to the region’s heavy reliance on imports from the Middle East.
Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which has called for an immediate end to the fighting. Beijing may need to look elsewhere for supply if Iran’s exports are disrupted, another factor that could increase energy prices.
“All parties have their responsibility to ensure stable and smooth energy supplies,” Chinese Foreign Ministry spokesman Guo Jiakun said in a briefing Monday. “China will take necessary measures to safeguard its own energy security.”
South Korean President Lee Jae Myung warned Monday of strict penalties for refiners and gas stations caught hoarding or colluding on prices, saying it would be wise to find alternatives to supplies that must travel through the Strait of Hormuz. The country’s Kospi index tumbled six per cent to 5,251.87.
The last time Brent and U.S. crude futures traded near the current level was in 2022, after Russia invaded Ukraine.
Why airfare could get pricier
Higher energy costs push inflation higher, straining household budgets and denting the consumer spending that is a main driver of many big economies. Those worries have spilled into financial markets, pulling share prices sharply lower.
Jet fuel prices could also rise in the months to come. U.S. airline stocks dropped last week, and United Airlines CEO Scott Kirby said on Friday that spiking fuel prices could lead to higher airfare.
Goh, the oil analyst, said that travellers are advised to book trips sooner rather than later.
Many airlines have hedge fuel programs in place, she said, which can help offset a sudden spike in fuel costs. But they won’t be able to sustain that forever.
“The jet fuel price at a higher level will kick in and they cannot absorb it entirely within the airlines themselves. So the consumer will need to feel the pain,” she said.
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