DUBAI, March 13, 2026, 14:45 GST
On Friday, the Iran war’s economic shockwaves intensified. Brent crude hovered over $100 a barrel, after the International Energy Agency described the conflict as the largest oil-supply disruption markets have ever seen. May Brent futures rose 1% to $101.48 as of 0730 GMT, setting up the contract for an almost 10% gain this week.
The shock isn’t just about crude anymore. Jet fuel prices have jumped twofold, and Beijing is already tapping its fertilizer reserves before spring planting season. That’s stirring up fresh inflation worries, right as traders in the U.S. and Europe back away from rate-cut wagers.
Global oil supply is set to drop by 8 million barrels a day in March, the IEA said — that’s roughly 8% of total demand. The agency cautioned that even with a record 400 million barrels being released from emergency reserves, getting back to normal could take weeks or even months. Everything hinges on the Strait of Hormuz, which handles about a fifth of the world’s oil and gas shipments. Until that chokepoint reopens and production plus refining picks up again, the market remains, in the words of S&P Global Energy’s Jim Burkhard, “seriously unbalanced.” Reuters
Consumers are feeling the impact. On Thursday, U.S. average gasoline was sitting at $3.60 a gallon. Joe Brusuelas at RSM said the reserve release will “slow rather than stop” the climb in oil prices. GasBuddy’s Patrick De Haan weighed in, saying, “the oil market right now is trying to figure where to find the 20 million barrels per day” missing from the Middle East. Reuters
Pressure in transport lanes is ramping up quickly. Over 100 container ships now sit stuck near Hormuz, while Freightos figures show air-freight prices out of South Asia toward Europe have jumped to $4.37 per kilo—up from $2.57 before the conflict started. Drugmakers and other exporters are shifting some shipments from vessels to aircraft. “The main shift I’ve heard about involves companies moving generic medicines from ocean freight to air cargo,” said Prashant Yadav, senior fellow at the Council on Foreign Relations. Air freight, by value, accounts for roughly a third of global trade. Reuters
Airlines are moving to offset higher costs. Air France-KLM plans to tack on 50 euros to long-haul economy tickets per round trip, after similar moves and fuel cost warnings from SAS and Qantas. Bank of America’s Nathan Gee flagged that budget carriers face even more risk here, since their travelers tend to be “the most price-sensitive”. Reuters
The squeeze is now hitting both farms and manufacturing plants. China announced it’s pulling nitrogen, phosphate, and compound fertilisers from commercial reserves a minimum of 15 days ahead of schedule. Sinopec, the top global refiner by processing capacity, is preparing to trim crude runs in March by over 10%, citing a supply shortfall linked to Hormuz.
Asia is taking the brunt of the initial fallout. In South Korea, about 70% of oil and 20% of liquefied natural gas comes from the Middle East. The government is now mulling extra energy vouchers and boosting nuclear and coal generation. India’s rupee slid to a record low on Friday, while ASEAN ministers said the shock is already showing up in Southeast Asian economies.
Europe’s vulnerability to actual oil shortages appears limited for now—Brussels points to Norway and the United States as the bloc’s top crude suppliers and sees no immediate threat to supply. But price volatility is landing hard: gas prices have surged almost 60% this month. Governments don’t have the fiscal firepower they did back in 2022 to cushion households, and traders are starting to price in another possible rate hike from the European Central Bank before year end.
Global equity funds saw $7.05 billion walk out the door in the week through March 11—the largest outflow since mid-December. That comes as investors start viewing the move as something bigger than a brief blip, grinding against slower growth and stubborn inflation.
Still, it all comes down to how long the disruption stretches. The IEA pointed to Saudi Arabia and the UAE pushing more oil through alternative routes outside Hormuz, potentially increasing supply as soon as April. Freightos researcher Judah Levine noted that some of the initial gains in air-cargo rates had tapered as airlines brought back capacity and some Gulf activity restarted. But if those efforts aren’t enough and the turmoil drags on for two months, Goldman Sachs now sees its Brent price forecast for the fourth quarter jumping to $93 a barrel—up sharply from $71.
