Oil prices surged on March 2, 2026, after the confirmed assassination of Iran’s Supreme Leader Ayatollah Ali Khamenei in a joint U.S.-Israeli strike, prompting retaliatory missile attacks. The crisis triggered a sharp rise in global volatility, with WTI crude hitting $108.30 per barrel and the VIX spiking above 42.
- WTI crude surged to $108.30 per barrel on March 2, 2026, after Iran’s Supreme Leader was assassinated.
- The CBOE Volatility Index (^VIX) spiked to 42.3, its highest level since 2022.
- Iran launched retaliatory missile strikes following a joint U.S.-Israeli operation.
- Front-month CL=F contracts traded at a $7.50 premium over the second-month contract.
- Defense stocks like RTX and LMT saw significant gains on increased military spending expectations.
- Shipping insurers raised premiums for vessels traversing the Persian Gulf due to heightened risk.
Global markets reacted with immediate volatility following the confirmed assassination of Iran’s Supreme Leader Ayatollah Ali Khamenei on March 1, 2026. A major military strike, attributed to a joint U.S.-Israeli operation, targeted Tehran, resulting in widespread explosions and visible plumes of smoke. In retaliation, Iran launched a wave of ballistic missile strikes across the region, escalating regional tensions to a new high. The immediate impact was felt in energy markets, where West Texas Intermediate (WTI) crude futures (WTI=F) jumped 8.7% on March 2 to reach $108.30 per barrel—its highest level since late 2023. The surge reflects deepening fears of supply disruption, particularly given the strategic location of the Strait of Hormuz, a chokepoint through which over 20 million barrels of oil per day pass. The CL=F contract, the primary benchmark for global oil pricing, also reflected the risk premium, with front-month contracts trading at a $7.50 premium over the second-month contract. Global equity markets plunged as risk-off sentiment dominated. The CBOE Volatility Index (^VIX) surged to 42.3, its highest level since 2022, signaling extreme investor uncertainty. Major indices including the S&P 500 and Euro Stoxx 50 both declined more than 3.5% in early trading. Defense stocks, particularly those with Middle East exposure—such as Raytheon Technologies (RTX) and Lockheed Martin (LMT)—saw sharp gains, reflecting increased defense spending expectations. The crisis has reignited concerns over global supply chain stability, with shipping insurers raising premiums for vessels transiting the Persian Gulf. The United Nations and several Western governments issued emergency statements urging de-escalation, but diplomatic channels remain largely stalled. The geopolitical shock has now become a primary driver of energy and financial market dynamics.