Energy Markets Rattle: Oil Prices Surge 3% Amid Hormuz Crisis

March 17, 2026

SINGAPORE — Global oil prices witnessed another aggressive surge on Tuesday morning as the geopolitical standoff in the Middle East intensified, fueling fears of a prolonged blockade in the Strait of Hormuz. Brent crude, the international benchmark, jumped nearly 3% to cross the $103 per barrel mark, while US West Texas Intermediate (WTI) followed suit, rising to over $96. The spike comes as the maritime “chokepoint”—responsible for a fifth of the world’s oil supply remains paralyzed by ongoing conflict.

The Hormuz Chokepoint Paralysis

The current price rally is a direct response to the effective closure of the Strait of Hormuz, where the Iranian Revolutionary Guard Corps (IRGC) has reportedly asserted control. For over two weeks, shipping traffic has dropped by an estimated 70%, with major tankers suspending operations due to the high risk of missile and drone attacks.

The market’s anxiety was further compounded following a US-led strike on Iran’s Kharg Island oil hub, which handles nearly 90% of Tehran’s exports. While the strike aimed to diminish Iran’s military capabilities, it simultaneously signaled to investors that the energy infrastructure in the region is now firmly in the line of fire.

Trump Demands Allied Naval Support

U.S. President Donald Trump has called on NATO allies and major Asian oil importers to deploy their own naval forces to help “unclog” the strait. However, the response from European and some Asian partners has been cautious, with many fearing that sending warships could escalate the regional war into a global confrontation.

“We are exploring various measures, but complying with the demand to send ships could trigger a wider crisis,” noted a spokesperson from the South Korean Foreign Ministry. This diplomatic friction has left traders skeptical about a swift reopening of the waterway, keeping the “war premium” on crude oil prices high.

Impact on Global Economies and India

The surge is already translating into pain at the pumps worldwide. In the United States, average gas prices hit $3.70 per gallon on Sunday, while several European nations have seen diesel prices exceed €2 per litre.

For import-dependent economies like India, which procures nearly 90% of its crude requirements, the situation is particularly critical. Analysts suggest that if Brent remains above $100 for an extended period, it could add billions to India’s annual import bill and trigger a sharp rise in domestic inflation. While the Indian government has used price controls to limit the immediate impact on citizens, the pressure on oil marketing companies is mounting.

Supply Buffer: The IEA Response

In an attempt to stabilize the volatile market, the International Energy Agency (IEA) has announced the release of 400 million barrels of crude from strategic reserves. While this buffer can offset about 20 days of a total Hormuz blockade, experts warn it is only a temporary fix.

“The next move in oil prices depends entirely on whether shipping normalizes,” says a senior commodities analyst. “If the stalemate continues into April, we could realistically see Brent touching $120 or even $150 per barrel.”