Conflict Costs Mount as World Scrambles to Plug Oil Supply Gaps

The economic costs of the Middle East conflict are mounting rapidly, with nations around the world scrambling to plug oil supply gaps as Iranian strikes continue to disrupt the region’s energy infrastructure. Brent crude climbed back toward $100 a barrel Thursday as the IEA’s record reserve release was overtaken by fresh violence and new supply disruptions. The mismatch between policy responses and the pace of events is becoming one of the defining features of this crisis.
Iranian forces struck merchant ships in the Strait of Hormuz, oil tankers near Iraq’s ports, fuel tanks in Bahrain, and facilities near Oman’s Mina Al Fahal export terminal. Three crew members aboard the Thai-registered Mayuree Naree were reported trapped. Iraq shut its oil ports, Bahrain issued shelter-in-place orders, and Oman cleared its main terminal of vessels.
Brent gained 9% Thursday to briefly hit $100.29 before settling at around $98, still up 6%. West Texas Intermediate climbed 8.6% to $94.75. Oil has risen from $60 at the year’s start to a weekly peak of $119 before partially retreating. Iran’s military warned of $200 oil.
The IEA released 400 million barrels of emergency crude from reserves held by 32 nations — the largest such action ever — while the US pledged 172 million barrels from its Strategic Petroleum Reserve. Despite the scale of intervention, new supply disruptions kept prices elevated. President Trump pledged to press ahead with the military campaign against Iran.
Goldman Sachs raised its Q4 2026 Brent forecast to $71 per barrel. Deutsche Bank flagged a stagflation risk. Japan’s Nikkei fell 1.6%, South Korea’s Kospi dropped 1.2%, and European gas added 7.7%.