• Oil prices could surge to $100 per barrel due to escalating Middle East tensions following US and Israeli strikes on Iran, according to Barclays (BCS) analyst Amarpreet Singh.
  • Brent crude has already risen 19% year-to-date to $72.48, driven by tighter inventories, reduced OPEC+ spare capacity, and slower US production growth, making a price spike more likely than in 2022.
  • Iran retaliated with ballistic missiles targeting Gulf states, including Saudi Arabia and the UAE, raising risks of broader regional conflict and disruptions to Persian Gulf oil flows.

Escalating Conflict and Market Reactions

On February 28, 2026, Israel and the United States conducted coordinated strikes on Iranian targets, codenamed "Roaring Lion" by Israel and "Operation Epic Fury" by the US, hitting military sites, nuclear facilities, missile infrastructure, and leadership compounds in cities like Tehran, Isfahan, and Bushehr. According to people familiar with the matter, the attacks were months in the planning and aimed at dismantling Iran's nuclear and missile capabilities, with US President Donald Trump justifying them as a move toward regime change. In response, Iran launched ballistic missiles at Israel and US bases in Jordan, Syria, and several Gulf states, including Kuwait, Bahrain, Qatar, Saudi Arabia, and the UAE, while Houthi rebels announced resumed attacks in the Red Sea, threatening key shipping lanes.

Oil markets reacted swiftly, with Brent crude climbing amid fears of supply disruptions. Strikes on Bushehr port, near a nuclear reactor, risk hampering Persian Gulf oil flows, potentially externalizing conflict costs to global energy markets. Barclays' Singh noted that the combination of geopolitical tensions and structural factors like tighter inventories and lower spare capacity could push prices to $100, a level not seen since earlier volatility. "The situation is more precarious than in 2022," Singh said in a briefing, emphasizing that slower US production growth adds to upward pressure. Efforts to reach officials at OPEC+ for comment were unsuccessful, but sources indicate the group is monitoring developments closely.

Regional and Global Implications

The conflict has drawn condemnation from the UN and several nations, with critics labeling the strikes destabilizing and illegal. Iranian civilians face severe costs, including damage to infrastructure and leadership compounds, amid prior economic strain and protests. Trump has urged Iranians to seize power post-regime fall, but experts caution that air power alone may not achieve regime change, with Chatham House predicting profound costs for Iran and broader regional reverberations. Gulf populations, hit by Iranian missiles, may resent US-aligned states, eroding local support and amplifying economic pressures.

In the short term, the existential conflict for Iran is unlikely to end quickly, with risks of escalation drawing in proxies and neighbors. Without a de-escalation deal, analysts warn of sustained oil shocks and potential nuclear proliferation risks if Iran survives weakened. The Houthis' resumed Red Sea attacks further complicate matters, threatening maritime security and adding to supply chain concerns. As of early March 2026, market watchers are bracing for volatility, with some traders reporting increased hedging activity. "We're seeing a flight to safety in energy assets," said one anonymous trader, highlighting how the crisis could reshape Middle East dynamics and global energy markets for years to come.

Correction: An earlier version misstated the date of the strikes; they occurred on February 28, 2026, not February 27.