Oil prices surged past $95 a barrel on Thursday, March 12, 2026, following reports of escalating conflict in the Strait of Hormuz, a critical chokepoint for global energy supplies. The immediate trigger was the reported sinking of the Marshall Islands-flagged tanker, Sabina, by an unidentified naval vessel, an incident confirmed by multiple international shipping agencies.
The attack on the Sabina, which was carrying crude oil destined for European markets, has intensified fears of a wider regional war and a significant disruption to global oil flows. The incident occurred despite increased naval patrols in the region led by the United States and several European allies, initiated in response to growing tensions between Iran and regional adversaries.
Economists are warning that a prolonged disruption to oil supplies could trigger a modern wave of stagflation, a combination of high inflation and slow economic growth, reminiscent of the 1970s. The Guardian reported that the current situation has sparked fears of stagflation for the global economy, citing the potential for both rising energy costs and reduced economic activity. The New York Times similarly characterized the conflict as the world’s latest economic hazard, noting the vulnerability of the global economy to geopolitical shocks.
The United States has condemned the attack on the Sabina, but has stopped short of directly accusing Iran, citing the ongoing investigation. A statement released by the State Department called for “restraint” and urged all parties to avoid further escalation. European Union officials have echoed these calls, emphasizing the require for a diplomatic solution. However, diplomatic efforts have so far yielded no tangible results, with Iran maintaining its position that It’s defending its interests in the region.
The price of Brent crude, the international benchmark, rose by more than 6% in early trading, reaching its highest level in over two years. Gasoline prices at the pump are also expected to rise sharply in the coming days, adding to inflationary pressures already facing consumers in many countries. Euronews.com reported that shocks from the Iran conflict continue to ripple through the global economy, impacting energy markets and consumer prices.
Time Magazine reported that the war threatens the global economy, highlighting the potential for a cascading series of economic consequences. These include increased shipping costs, supply chain disruptions, and a slowdown in global trade. The International Monetary Fund (IMF) is currently reviewing its global economic forecasts in light of the escalating conflict, with officials warning that a significant downward revision is likely.
The situation remains fluid, with further military engagements anticipated. The United Nations Security Council is scheduled to convene an emergency session later today to discuss the crisis, but a resolution is unlikely given the deep divisions among its members. As of late Thursday, no party has claimed responsibility for the sinking of the Sabina, and the investigation is ongoing.
