Oil prices surged past $100 a barrel on Saturday, March 22, 2026, as the fourth week of the US-Israel war with Iran brought mounting economic problems and a mixed message from Washington, according to reports from financial markets and energy analysts.
Initial reactions to the conflict, which began with a US strike on Iran’s Natanz nuclear site on February 28, had predicted a short-lived economic impact. One US-based fund manager, speaking shortly after the airstrike that killed Ayatollah Ali Khamenei, suggested the fallout would be a “tail risk,” citing historical precedent. Goldman Sachs anticipated temporary disruption, forecasting a decline in oil prices throughout the year, albeit with risks skewed to the upside. UniCredit predicted crude would be capped at $80 a barrel, reasoning that Iran’s need for survival would encourage a measured response.
Those predictions have proven inaccurate. Beyond the spike in oil prices, European gas prices have doubled and financial markets are experiencing heightened volatility. Consumers globally are bracing for increased living costs. Central banks, including the US Federal Reserve, the Bank of England, and the European Central Bank, have warned the war could materially impact inflation and global growth.
The Trump administration granted a temporary license on Friday, March 20, allowing Iran to sell around 140 million barrels of crude oil in an attempt to calm jittery markets, as reported by CNN. However, US officials have stated this measure will provide limited financial benefit to Iran.
Despite the oil release, the situation continues to escalate. Iran has threatened to disrupt oil supplies through the Strait of Hormuz, targeting shipping and energy infrastructure across the Middle East. An Iranian missile strike on Ras Laffan, a key Qatari liquefied natural gas (LNG) processing facility, has led analysts to warn of a potential “doomsday” scenario for energy markets. Iran also unsuccessfully targeted a joint US-UK military base in the Indian Ocean with ballistic missiles, according to a CNN source.
The US message has been inconsistent. President Trump has declared the war “won” while simultaneously suggesting it could end “soon” or require further escalation, creating uncertainty for global markets. Barclays likened this communication to a “fog of war,” contributing to violent market swings.
European heavy industry, still recovering from the energy price shock following Russia’s 2022 invasion of Ukraine, is particularly vulnerable. Huntsman has warned its Teesside plant in England is at risk, and BASF, the world’s largest chemicals firm, is raising prices. The cost of fertilizer, a byproduct of the petroleum industry, is rising sharply, threatening farmers worldwide and potentially leading to significant increases in food prices.
Supply chain disruptions are also emerging. Qatar has halted helium production – critical for microchip and MRI machine manufacturing – as it accounts for a third of global supply. Analysts suggest this could impact global manufacturing, from automobiles to electronics. China has issued an export ban on refined products to protect domestic consumption, and other countries, including South Korea, are considering similar measures.
Economists warn a prolonged conflict could resemble past global economic crises, citing the oil price surges of 1973, 1979, and 1990. Barclays estimates that if oil prices average $100 a barrel in 2026, global growth could be 0.2 percentage points lower, and headline inflation 0.7 percentage points higher than previously forecast. Some economists predict oil prices could exceed $170 a barrel, triggering a global recession, particularly impacting the UK, the eurozone, and Japan.
Despite the economic turmoil, global financial markets have remained relatively stable, a contrast to the reaction following Trump’s tariff threats in April 2025. This is attributed to factors such as the US’s energy independence, China’s substantial oil stockpiles, and increased renewable energy capacity. However, the fragmentation of the global economy, accelerated by geopolitical tensions and trade wars, is expected to add permanent costs and potentially fuel inflation.
The Iranian foreign ministry spokesman, Esmaeil Baqaei, stated on Sunday, March 22, that expecting restraint from Iran is “pointless” while the country continues to be subjected to air strikes, according to Sky News. Israel’s defense minister has indicated that US and Israeli strikes on Iran will “increase significantly” this week.
