Concerns about a global stagflationary shock are intensifying as oil prices hover near $100 a barrel and the conflict in the Middle East shows no sign of abating. Brent crude rose around 6% Thursday to nearly $98, extending a weeks-long surge that has pushed the oil price from $60 at the start of the year to a peak of $119. Economists and market strategists are increasingly drawing comparisons to the oil shocks of the 1970s.
Iran struck merchant ships, fuel facilities, and oil export ports across Bahrain, Iraq, and Oman on Thursday, demonstrating the breadth of its campaign against regional energy infrastructure. The Thai vessel Mayuree Naree was hit near the Strait of Hormuz, with three crew members reportedly trapped. Iraq shut all oil ports, and Bahrain told residents in parts of the country to shelter at home.
Oman evacuated its Mina Al Fahal crude terminal after a nearby port came under drone attack. The Strait of Hormuz has been functionally closed since February 28, blocking a fifth of global seaborne energy flows. Saudi Aramco has warned that a continued blockade could be catastrophic for the world’s oil markets.
The IEA released 400 million barrels of emergency crude in a historic coordinated action. The US pledged 172 million barrels from its Strategic Petroleum Reserve, with deliveries beginning within a week. Iran responded with threats, warning that oil could climb to $200 a barrel if regional instability — which it blames on US military action — continues.
Goldman Sachs raised its Brent Q4 2026 forecast to $71 a barrel from $66. Deutsche Bank strategist Jim Reid said the probability of a broader stagflationary shock is rising as investors anticipate a protracted conflict. Asian markets fell and European gas prices rose 7.7%.