On 28 February 2026, coordinated U.S.–Israel strikes on Iranian assets triggered a rapid escalation in the Gulf, delivering one of the most severe recent shocks to global energy security. Iran’s retaliation heightened risks around the Strait of Hormuz, a critical energy transit route.
As tanker traffic fell and insurers repriced war risk, oil and gas markets swung sharply: crude prices rose, natural gas prices surged based on fears of sustained supply disruption, and higher freight costs fed inflation. Analysts warned that prolonged instability could raise the price of crude well above $100 per barrel, intensify inflationary pressures, and slow global growth, underscoring how quickly disruptions at key chokepoints transmit across global energy markets.1 Notably, the relationship between geopolitical conflict and oil price volatility is well established.
Historical episodes, including the 1973 Arab oil embargo and the Iran–Iraq War (1980-1988), demonstrated how instability in major oil-producing regions can trigger systemic economic consequences. The 2026 crisis represents a contemporary manifestation of these dynamics, exposing the continued dependence of global energy markets on geographically concentrated and politically sensitive supply routes.
Against this backdrop, we examine the interaction between geopolitical conflict and oil price volatility through the lens of the 2026 Iran crisis. We analyse the strategic importance of the Strait of Hormuz, the transmission channels through which geopolitical shocks affect global energy markets, and the legal frameworks governing maritime passage and energy trade, including international maritime law, contractual risk allocation mechanisms, and sanctions regimes. We further consider the implications and effects of sustained geopolitical tension for oil-producing economies such as Nigeria.
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