Middle East Conflict Triggers Largest-Ever Oil Supply Disruption

The International Energy Agency (IEA) has warned of the largest oil supply disruption in history due to the ongoing conflict in the Middle East. The agency expects global supply to drop by 8 million barrels per day in March, equaling nearly 8% of world demand.

This decline is attributed to the blockade of the Strait of Hormuz, a critical waterway along the Iranian coast, since US and Israeli airstrikes on Iran began on February 28. The IEA had previously forecasted a sizeable surplus in oil markets for the first quarter of 2026 but has now revised its outlook.

Brent crude prices rose by 5% to just below $97 a barrel as Iran increased attacks on oil and transport facilities across the Middle East, raising concerns about prolonged conflict and continued disruptions in oil flows through the Strait.