Crude oil futures climbed over 8% in early trading on March 2, 2026, as escalating conflict between the U.S. and Israel with Iran led to the effective closure of the Strait of Hormuz. The supply disruption has triggered a global energy shock, with the benchmark CL=F reaching $98.40 per barrel.
- CL=F surged over 8% to $98.40 per barrel on March 2, 2026
- Strait of Hormuz handling capacity: 18 million barrels per day
- XLE rose 6.7% on energy sector optimism amid supply concerns
- VIX climbed to 28.9, reflecting heightened market volatility
- Forward freight rates for Persian Gulf tankers up 40% in two days
- Brent crude expected to reach $105 if disruptions continue
Global oil markets plunged into turmoil on March 2, 2026, as the U.S.-Israel military campaign against Iran resulted in the de facto closure of the Strait of Hormuz, a critical chokepoint for 20% of global oil shipments. The disruption caused benchmark crude futures (CL=F) to spike to $98.40 per barrel, marking their highest level since March 2025 and registering the largest single-day gain in four years. This surge reflects a systemic supply shock, as tankers avoid the region due to heightened naval activity and targeted strikes near key shipping lanes. The energy sector responded sharply, with the Energy Select Sector SPDR Fund (XLE) jumping 6.7% in early trading, signaling strong investor reassessment of supply risks. The broader market also reacted, as the CBOE Volatility Index (^VIX) rose to 28.9, indicating elevated fear and uncertainty. Analysts note that the Strait of Hormuz handles approximately 18 million barrels per day of crude oil, with the majority originating from Saudi Arabia, Iraq, and Kuwait—nations now facing constrained export routes. The market is pricing in prolonged disruptions, with forward freight rates for crude tankers in the Persian Gulf increasing by over 40% in the past 48 hours. As alternative shipping routes via the Suez Canal or around the Cape of Good Hope become more costly and time-consuming, the physical delivery of crude is expected to lag behind demand, worsening global tightness. Projections now suggest Brent crude could breach $105 per barrel by mid-March if the closure persists.