Oil Prices Soar as Conflict in Iran Continues
Oil prices have surged from $65 per barrel before the conflict in Iran began in February 2026 to over $100 per barrel in mid-September. With traffic in the Strait of Hormuz hovering below 15% of prewar levels, the global oil market has largely exhausted its safety measures to keep a lid on petroleum prices.
The United States and Israel's attacks on Iran have led to significant price hikes, with some analysts predicting prices could reach $150 or even $200 per barrel. However, this hasn't happened yet. The recent attack on the East-West pipeline in Saudi Arabia has further tightened oil markets, forcing the Saudis to temporarily halt oil shipments through that pipeline.
The pipeline has now restarted operations at very low volumes, but it will likely take at least six to eight weeks to regain full capacity. Meanwhile, Ukraine's drone attacks have damaged refineries in Russia, reducing Russian production of diesel fuel and prompting the country to ban exports of it.
The high prices have led to record-high diesel prices in 47 US states, with the national average reaching $6.52 per gallon. President Donald Trump has threatened to ban diesel exports, which analysts suggest would make matters worse by accentuating global supply shortages and driving world prices upward.