Brent crude breaks $118 as Iran war triggers global energy crisis
Oil prices hit their highest level since 2012 following the Iranian drone strike on the US embassy in Riyadh, with energy economists warning that sustained conflict could push Brent toward $130 a barrel and trigger a global recession.
Economy — March 6, 2026
Brent crude oil surged past $118 a barrel in after-hours trading on March 5, 2026, following Iran's drone strike on the US embassy in Riyadh, reaching its highest price since 2012 as traders priced in the risk of serious disruption to Gulf energy production and shipping lanes.
The price spike represented a more than 35% increase since February 27, the day before the US and Israel launched military operations against Iran. At its peak, Brent briefly touched $119.40, a level last seen during the supply shock of 2012.
Iran produces approximately 1.5 million barrels of oil per day and has threatened to close the Strait of Hormuz — through which roughly 20% of global oil trade passes — in the event of further US escalation. While Iran has not yet moved to enforce that threat, insurance markets have already repriced dramatically: war risk premiums for tankers transiting the Gulf of Oman quadrupled in the first week of the conflict.
The Philippines became the first Asian government to declare a formal national energy emergency, as domestic fuel prices rose more than 40% from their pre-war levels. Transport workers announced planned protests and the government ordered emergency releases from the strategic petroleum reserve.
The International Energy Agency convened an emergency meeting of member governments and agreed to a coordinated release of 120 million barrels from strategic reserves — roughly the largest such release in the IEA's history — in an attempt to stabilise markets. The United States committed 60 million barrels from the Strategic Petroleum Reserve.
Goldman Sachs warned in a research note that if the conflict extended beyond 90 days and Iranian exports were cut by more than 50%, Brent could reach $135 to $145 a barrel, a scenario the bank said would be 'sufficient to trigger a global recession in the second half of 2026.'
Russia, which has benefited enormously from elevated oil prices while simultaneously facing Western sanctions, did not participate in the IEA release. Moscow mocked European nations for what its foreign ministry called 'self-castrating' energy policy decisions.
