Iran Conflict Drives Oil Prices to Near-Historic Highs
The global oil market is facing significant price hikes and potential shortages due to ongoing conflicts in the Middle East. Since the war in Iran began, oil prices have increased from $65 a barrel in February 2026 to over $100 a barrel in mid-September.
The Strait of Hormuz, the primary route for oil leaving the Middle East, has seen traffic below 15% of prewar levels, exacerbating the situation. Saudi Arabia's East-West pipeline, which can carry up to 7 million barrels per day, was forced to halt operations after attacks in mid-September.
The pipeline has since restarted at low volumes, but it will take six to eight weeks to regain full capacity. Meanwhile, Ukrainian drone attacks have damaged Russian refineries, reducing diesel production and prompting a ban on exports.
In the US, 47 states experienced record-high diesel prices in September, with the national average reaching $6.52 per gallon. President Donald Trump has threatened to ban diesel exports, which analysts say would worsen global supply shortages and drive prices up further.