Oil Price Shock Tests World Economies as Iran Presses Its Military Advantage

The oil price shock generated by Iran’s military campaign against Middle Eastern energy infrastructure is testing the resilience of economies worldwide, with Brent crude near $100 a barrel Thursday and no diplomatic off-ramp in sight. The conflict has disrupted a web of interconnected supply routes, storage facilities, and export terminals that collectively underpin the world’s energy system. Policymakers are reaching for tools designed for shorter-term disruptions while facing what may be a prolonged crisis.
Iran struck merchant vessels, fuel storage facilities, and oil export terminals across Bahrain, Iraq, and Oman on Thursday. The Thai-registered Mayuree Naree was hit near the Strait of Hormuz, with three crew members reported trapped. Iraq shut its oil ports entirely, and Oman cleared its Mina Al Fahal terminal after a neighboring port was attacked.
Brent crude rose around 6% Thursday to nearly $98 after briefly topping $100. West Texas Intermediate gained 8.6% to $94.75. The oil price has more than doubled from around $60 at the start of the year, with a peak of $119 reached earlier in the week. Iran’s military added to market fears by warning that oil could rise to $200.
The IEA coordinated the release of 400 million barrels from emergency reserves held by 32 member nations, while the US contributed 172 million barrels from its Strategic Petroleum Reserve. President Trump said the release would reduce prices as the military campaign against Iran is completed. Energy Secretary Chris Wright accused Iran of deliberately targeting allied energy security.
Goldman Sachs raised its Q4 2026 Brent forecast to $71 per barrel. Deutsche Bank flagged the risk of a stagflationary shock. Japan’s Nikkei and South Korea’s Kospi both declined, while European natural gas prices rose for a second day.