Oil Prices Surge: Iran Threats & $4 Gas as Conflict Escalates

Oil Prices Surge as Iran and US Trade Threats

Oil prices climbed on Monday, March 23, 2026, as escalating tensions between the US and Iran fueled concerns about supply disruptions. Brent crude futures were up 0.5% at $112.78 per barrel at 12:10 a.m. ET, while US West Texas Intermediate rose 0.9% to $99.07 per barrel. The volatility reflects a market increasingly sensitive to geopolitical risks in the Middle East.

The price of a barrel of oil has more than doubled since February 28, when US and Israeli strikes against Iran began, jumping from a manageable $70 to its current level. This rapid increase is directly linked to the conflict and the potential for wider disruption to global energy flows.

The latest escalation came over the weekend, with President Donald Trump threatening to attack Iran’s power plants if the Strait of Hormuz isn’t reopened within 48 hours. Trump specifically stated the US would target the “biggest one” if Iran continued to block the vital shipping lane. Iran responded with threats to strike critical infrastructure belonging to the US and Israel across the Middle East.

The Strait of Hormuz, through which approximately 20% of the world’s oil supply and liquefied natural gas passes, has been effectively closed by Iran since the start of the conflict. While some vessels are being allowed passage, the disruption is enough to send shockwaves through the energy market. Iran’s actions are frustrating Trump, who campaigned on a promise to lower energy prices for Americans.

Broader Economic Impacts

The conflict’s impact extends beyond oil. The disruption of critical materials and commodities, including helium, pharmaceuticals, and fertilizer, is adding to global supply chain pressures. The national average price of gasoline in the United States is nearing $4 a gallon, exacerbating inflationary concerns and diminishing hopes for near-term interest rate cuts by the Federal Reserve.

Chris Weston, head of research at Pepperstone, noted the significance of Trump’s threats, stating that markets are likely to take his demands seriously given his demonstrated willingness to follow through on military action when his demands go unmet. Weston added that the outcome and Trump’s next steps will have significant implications for markets through the remainder of the week and into month and quarter end.

While gold traditionally acts as a safe-haven asset during times of geopolitical uncertainty, it has bucked the trend, falling as much as 3.8% on Monday to $4,320.30 per troy ounce. This decline is attributed to rising bond yields, fading expectations for rate cuts, and speculative profit-taking. Commodities strategist Ewa Manthey of ING explained that geopolitical events rarely drive gold prices in a sustained way, and that liquidity needs often outweigh safe-haven demand in the early stages of a crisis.

Brent crude is up 85% this year, and WTI is up over 70%, demonstrating the significant impact of the conflict on energy markets. The situation remains fluid, and traders are bracing for continued volatility as the US and Iran remain locked in a tense standoff. The coming days will be critical in determining whether the conflict escalates further and what the long-term consequences will be for global energy supplies and the broader economy.