Energy markets offer ‘relatively small reaction’ to Iran war, but prices could spike if oil and gas aren’t flowing by the end of the week

Fortune

by Jordan Blum

March 2, 2026

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Energy markets have shown a surprisingly muted response to recent escalations in tensions between the U.S., Israel, and Iran. Despite the closure of the strategically vital Strait of Hormuz, which normally handles nearly 20% of global oil and gas exports, crude oil prices only increased by about 6% on March 2. This relative calm in the markets suggests that traders are cautiously waiting for further developments before reacting more strongly. However, analysts warn that if the strait remains closed beyond the end of the week, prices could surge significantly, potentially exceeding $100 per barrel. The Strait of Hormuz, a narrow waterway between Iran and the Arabian Peninsula, is currently facing severe disruptions. While oil exports are not officially blocked, several tankers have been damaged, and third-party insurers are increasingly reluctant to cover shipments through the strait. This reluctance has caused delays in maritime traffic, with some tankers waiting to move until the U.S. provides security guarantees. Meanwhile, Saudi Arabia, Kuwait, and Qatar have reported minor damage to refineries and export facilities, but no major production assets have been targeted yet. The geopolitical landscape has already impacted oil prices, which have risen 25% since the start of the year. Crude oil futures in the U.S. climbed from $57 per barrel in January to nearly $71 by March 2. This upward trend reflects growing concerns over supply disruptions and escalating tensions between Iran and its adversaries. However, the market’s measured response suggests that traders are not yet convinced of a prolonged conflict or severe supply shortages. For consumers, this situation translates into rising gasoline prices. The national average for regular unleaded gas has climbed from $2.73 per gallon in January to nearly $2.96 today and is expected to surpass $3 soon. Experts predict that as the conflict continues, fuel prices could face even more upward pressure due to reduced supply and heightened geopolitical uncertainty. This evolving situation matters significantly for businesses and economies

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Originally published on Fortune on 3/2/2026