The escalating US-Israel war with Iran has triggered a major disruption in global oil supplies, with major shipping companies diverting tankers away from the Strait of Hormuz, the narrow chokepoint carrying about 20 per cent of the world’s petroleum. As soon as the stock exchanges open on Monday morning, March 2, the price of crude oil is expected to sky-rocket, which will have an almost immediate effect on the price at the pump.
Economic analyst Shanaka Anslem Perera warns that Iran has made the strait effectively “uninsurable”, not through direct closure but by raising risks so high that underwriters and fleets are refusing passage.
Twenty million barrels of oil passed through the Strait of Hormuz yesterday.
Today the number may be zero.
Not because Iran mined the water. Not because a tanker was hit. Because Lloyd’s of London picked up the phone.
War risk underwriters began canceling policies for strait… pic.twitter.com/imlhmLn82G
— Shanaka Anslem Perera ⚡ (@shanaka86) March 1, 2026
Major vessels like the KHK Empress (Omani crude), Eagle Veracruz (Saudi crude), and Front Shanghai (Iraqi crude) executed abrupt U-turns or halted transits. Nippon Yusen ordered its entire fleet to avoid the strait, while “Greece told its merchant armada to reassess passage. Hapag-Lloyd suspended all transits” advised reassessment or suspension. No shots were fired at these ships, but a single warning from Iran’s Revolutionary Guard was enough: “No ship is allowed to pass.”
The geological bottleneck, just 21 miles wide between Dubai, Oman and Iran, funnels one-fifth of global oil and large amounts of LNG. Perera says that even the powerful US Fifth Fleet, with carriers like the USS Abraham Lincoln capable of overwhelming threats, can’t force insurers to accept the risk with missile exchanges and retaliatory strikes continuing.
Analysts from Goldman Sachs predict Brent crude will peak at $110 per barrel, while JP Morgan sees $120 to $130 if disruptions carry on. OPEC+ has agreed to modest output increases, but bypass pipelines from Saudi Arabia and the UAE bottleneck, just handle only about 3 million barrels daily, far short of the 20 million normally flowing through Hormuz.
Why fuel prices are about to jump
Brent crude closed Friday at around $72 to $73 per barrel but jumped 10 per cent to about $80 in over-the-counter trading Sunday, with futures suggesting further gains when markets fully reopen on Monday. Even US West Texas Intermediate hovered near $67 facing similar pressure.
Experts forecast big price hikes starting Monday, potentially pushing averages higher in weeks, with sharper spikes if the conflict drags on.
MASSIVE BREAKING: Iran has struck the oil tanker ‘Skylight’ near the Strait of Hormuz.
Four sailors were injured. The attack took place 5 miles north of Khasab Port in Oman.
The attack occurred after the ship ignored Iran’s order not to enter the straight.
Oil prices are… pic.twitter.com/y9EiQHFiTZ
— Brian Krassenstein (@krassenstein) March 1, 2026
Should you fill up today?
Recommendable – top up your tank now while prices remain relatively stable due to the weekend. The “fear premium” from uninsurable shipping routes could drive quick retail hikes. Drivers with low tanks or upcoming travel should act before Monday’s expected volatility. De-escalation of the fighting could ease pressures, but current reports show ongoing threats to Gulf shipping and energy infrastructure, and high insurance costs to tankers that cost €100 million, and €250,000 per voyage to insure.
