Oil and gas prices rise on new Iran threat to Gulf shipping

Iranian official threatens to "set fire" to any ships passing through the crucial Strait of Hormuz.

As of March 3, 2026, the average U.S. gasoline price surged 11 cents overnight to approximately $3.11 per gallon, amid escalating geopolitical tensions involving Iran, including attacks on U.S. and Saudi facilities and disruptions in the Strait of Hormuz.

Amid escalating conflict involving Iran, global oil and gas prices have surged as the Strait of Hormuz—a key maritime chokepoint for roughly 20% of global oil and LNG shipments—faces significant disruption due to attacks on tankers and energy infrastructure.

Ongoing U.S. and Israeli attacks on Iran have introduced heightened uncertainty to the U.S. economy, already strained by persistent inflation, weak hiring, and recent tariff conflicts, with crude oil prices rising over 6% amid the conflict.

The Strait of Hormuz, a narrow and vital maritime passage connecting the Persian Gulf to the Gulf of Oman, plays a crucial role in the global energy market, with about one-fifth of the world’s oil shipments passing through it, and recent attacks have halted tanker traffic, causing a spike in global oil prices.

Amid escalating tensions and conflict with Iran, global oil prices have surged to their highest levels since the military campaign began, with Brent crude trading at approximately $83 per barrel, marking an increase of over $10 in just a week, leading the Trump administration to prepare measures to mitigate the economic impact of rising energy prices.

In response to surging oil and shipping costs, President Trump announced that the U.S. will offer immediate political risk insurance and guarantees through the U.S. Development Finance Corporation to support energy tankers operating in the Gulf region.