Oil prices rose sharply on Monday (March 2, 2026) as U.S. and Israeli attacks on Iran and retaliatory strikes against Israel and U.S. military installations around the Gulf sent disruptions through the global energy supply chain.

Traders were betting the supply of oil from Iran and elsewhere in the Middle East would slow or grind to a halt. Attacks throughout the region, including on two vessels traveling through the Strait of Hormuz, the narrow mouth of the Persian Gulf, have restricted countries’ ability to export oil to the rest of the world. Prolonged attacks would likely result in higher prices for crude oil and gasoline, according to energy experts.

West Texas Intermediate, the light, sweet crude oil produced in the United States, was selling for about $72 a barrel early Monday (March 2), up around 7.3% from its trading price of about $67 on Friday (February 27, 2026), according to data from CME group.

A barrel of Brent crude, the international standard, was trading at $78.55 per barrel early Monday (March 2), according to FactSet, up 7.8% from its trading price of $72.87 on Friday (February 27), which had been a seven-month high at the time.

Higher global energy prices could lead to consumers paying more for gasoline at the pump and shelling out more for groceries and other goods, at a time when many are already feeling the impacts of elevated inflation.

Roughly 15 million barrels of crude oil per day — about 20% of the world’s oil — are shipped through the Strait of Hormuz, making it the world’s most critical oil chokepoint, according to Rystad Energy. Tankers travelling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.

Iran had temporarily shut down parts of the strait in mid-February for what it said was a military drill, which led oil prices to jump about 6% higher in the days that followed.

Against that backdrop, eight countries that are part of the OPEC+ oil cartel announced they would boost production of crude on Sunday (March 1). The Organisation of Petroleum Exporting Countries, in a meeting planned before the war began, said it would increase production by 206,000 barrels per day in April, which was more than analysts had been expecting. The countries boosting output include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.

“Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” said Jorge León, Rystad’s senior vice president and head of geopolitical analysis, in an email.

“If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets.” Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which may need to look elsewhere for supply if Iran’s exports are disrupted, another factor that could increase energy prices.

The ​head of ‌public relations at the ​Iranian ⁠Supreme Leader’s office on Saturday ‌(February 28, 2026) accused the country’s enemies ‌of “mental ‌warfare” ⁠after Israeli ⁠reports Ayatollah Ali Khamenei had been ​killed, ‌Iranian state media reported.

“The enemy is resorting ‌to mental ​warfare, all should be aware,” ⁠the public relations official ‌was quoted as saying.

A senior Israeli official ‌told Reuters on ​Saturday that Mr. Khamenei was killed ⁠in Israeli ⁠and U.S. strikes.

Israeli ‌Prime Minister Benjamin ​Netanyahu ⁠also said on Saturday (February 28, 2026) that ‌there were ‌many ‌signs indicating ⁠Iran’s ⁠Supreme Leader Ayatollah ​Ali ‌Khamenei “is no longer”, without explicitly confirming ‌his ​death.

Mr. Netanyahu also said ⁠Mr. Khamenei’s compound had ‌been destroyed.

Trump on Khamenei’s death

U.S. ​President ‌Donald Trump told ​NBC News ⁠in an interview ‌on Saturday (February 28, 2026) that ‌he ‌believes ⁠reports ⁠of Iranian Supreme Leader Ayatollah ​Ali ‌Khamenei’s death are correct.

“We feel that ‌that ​is a correct ⁠story,” Mr. Trump told ‌NBC News in a phone interview, according ‌to a ​report on its ⁠website.

U.N. Secretary-General Antonio ‌Guterres told an ​emergency ⁠meeting of the U.N. ‌Security Council on ‌the Iran ‌conflict ⁠on ⁠Saturday (February 28, 2026) that he deeply regretted ​that ‌an opportunity for diplomacy had been “squandered.”

He ‌also told ​the 15-member body ⁠he was not ‌in a position to confirm Israeli reports of ‌the death ​of Iran’s Supreme ⁠Leader Ali Khamenei.