Brent at $100, Gold at $6,000? Energy Shock After Iran Blocks Strait of Hormuz

A joint US-Israeli military operation launched in late February against Iran has sharply escalated tensions in the Middle East, triggering massive missile exchanges and immediate economic consequences. After the campaign began, Iranian authorities moved to close the Strait of Hormuz, a vital maritime artery for global energy supplies, sending shockwaves through commodity markets.

Photo: The Canadian Coast Guard's "First Arctic" channel is licensed free for commercial use.

The bulk carrier Thamesborg ran aground in Franklin Strait.

Oil Prices Spike as Hormuz Traffic Halts

The Strait of Hormuz previously handled roughly one-third of global seaborne oil trade, making it one of the most strategically important chokepoints in the world. Tehran's decision to suspend traffic through the corridor stunned global energy traders and sharply reduced supply expectations.

During trading on Monday, March 2, Brent crude briefly surged to $81.5 per barrel, its highest level since January of the previous year. Prices later corrected to around $77.5, but the benchmark remained significantly above pre-escalation levels.

Analysts warn that current prices may not represent the ceiling. If the confrontation between Iran and the United States expands into a broader regional war involving multiple Middle Eastern states, oil could break the psychological $100 per barrel threshold. In a worst-case scenario, some forecasts place Brent between $150 and even $200-300 per barrel, reflecting severe supply disruption.

Gold and Silver Rally on Safe-Haven Demand

As oil climbed, precious metals followed. Gold futures on the Comex exchange rose more than 3 percent during Monday trading, briefly reaching $5,425 per troy ounce. Silver showed a similar trajectory, gaining over 3 percent to trade near $96.25.

Market strategists expect the upward trend in safe-haven assets to persist amid geopolitical uncertainty. Some projections suggest that gold could approach $5,800 per ounce if hostilities evolve into a prolonged regional conflict. Analysts note that the most rapid gains often occur in the early weeks of military escalation, when uncertainty peaks and investors seek protection from volatility.

Shipping and LNG Trade at Risk

The closure of the Strait of Hormuz threatens not only crude oil flows but also shipments of liquefied natural gas. The corridor serves as a critical passage for Gulf exporters supplying Asian and European markets.

Even before the military campaign began, freight rates for very large crude carriers traveling from the Middle East to China had nearly tripled, reaching approximately $151,000 per day by late February. With the outbreak of hostilities and rising risks of missile strikes on maritime routes, charter costs could climb further.

Industry observers warn that tanker availability may decline sharply, echoing shipping disruptions seen during previous regional crises. Prolonged instability could strain global supply chains at a time when the world economy remains fragile after pandemic-era disruptions and heightened trade tensions.

The Strait of Hormuz remains one of the world's most critical economic pressure points, and any sustained closure risks amplifying inflation, destabilizing energy markets, and slowing global growth.

As the military situation unfolds, commodity markets will likely remain highly sensitive to developments on the ground, with energy and precious metals acting as immediate barometers of geopolitical risk.