#oil-prices

#oil-prices

Since the United States and Israel first launched strikes on Iran on February 28, the conflict has escalated across the region, sparking concerns about the knock-on effect for the global economy. On March 2, Ebrahim Jabari, a senior adviser to the commander-in-chief of Iran's Islamic Revolutionary Guard Corps (IRGC), announced that the Strait of Hormuz through which 20 percent of the world's oil and gas is transported was closed; a move that sent oil prices soaring above $100 per barrel.

We are not a party to the conflict and therefore France will never take part in operations to open or liberate the Strait of Hormuz in the current context. However, we are convinced that once the situation becomes calmer... we are ready, alongside other nations, to take responsibility for an escort system.

The dollar stabilised to a certain extent today after retreating in the prior session, but could remain relatively volatile as markets react to geopolitical developments in the Middle East. Treasury yields were firmer following a pullback on Monday as well.

If we ever needed help, they won't be there for us. I've just known that for a long period of time... We have some that are really enthusiastic. They're coming already... My attitude is, we don't need anybody. We're the strongest nation in the world. We have the strongest military by far in the world we don't need them.

The dominant force in play remains the Middle East conflict, which has kept oil prices elevated and inflation expectations firm. Reports that Washington is assembling a coalition to escort vessels through the Strait of Hormuz could offer some relief for the oil market and could weigh on the dollar.

Average U.S. regular gasoline prices are $3.70 per gallon on Sunday, up roughly 70 cents during the war, per AAA. It's up 46% since the U.S. strikes began. Trump said Friday that the U.S. hit military targets on Iran's Kharg Island, the origin point for almost all Iranian oil exports.

WTI crude is currently just shy of $94 a barrel, with brent at $99, just a hair away from $100. The move was driven by the effective closure of the Strait of Hormuz. The move has been swift and severe, with energy ETFs like USO surging nearly 10% in a single session.

The US-Israeli war on Iran has already led to hundreds of deaths, created an ecological crisis linked to strikes on oil depots and sent fossil fuel prices haywire across the globe. Critics say the war also shows the inherent instability of dependence on oil and gas: unlike wind and solar power, fossil fuel-based energy requires constant inputs of products whose availability and costs are determined by the global market.

For many airlines, jet fuel is one of their largest expenses. As a result, popular global carriers such as Qantas, Scandinavian Airlines, and Air New Zealand have increased their airfares this week to help cover costs. While US airlines have not yet announced similar ticket hikes, US flight prices will need to rise by at least 11% to cover the current increase in jet fuel expenses.

Chevron delivered record worldwide production of 4,045 MBOED in 2025, up 12% year-over-year, giving it more barrels to sell into a recovering price environment. Operating cash flow hit $33.9 billion for the full year, covering the $12.8 billion dividend payout by roughly 2.7 times, a cushion that makes a dividend cut look unlikely even in a moderate oil price downturn.

The expectations of a decrease in tensions triggered a pullback in oil prices, which in turn softened immediate concerns about inflation pressures. However, the broader geopolitical backdrop remains fragile, and any renewed escalation could quickly push oil prices, the dollar, and Treasury yields higher again.

Petrol and diesel prices have hit their highest in nearly 20 months this week, latest data shows, increasing by between 4.68p and 8.59p per litre since Saturday 28 February, when the US launched strikes on Iran. On average, drivers can now expect 137.51p per litre of unleaded petrol, and 150.97p per litre of diesel, at the pump.