Brent crude oil has so far moved only a little in response to the Middle East war and the de facto closure of the Strait of Hormuz. It rose to just over $80 in Asian trading before easing.
If the war lasts only a few weeks, the German and eurozone economies are expected to see limited effects. If it continues for several months, eurozone inflation is expected to rise by at least 1 percentage point and growth to be a few tenths of a percentage point lower.
In a longer conflict, the Strait of Hormuz may stay impassable for an extended period. In that case, Brent could move towards $100 per barrel and stay near that level for a time.
A move to $100 would be about a 40% rise from mid-February levels, before war speculation increased. The article was produced with the help of an AI tool and checked by an editor.
We saw Brent crude react moderately at first to the Middle East conflict in late 2025, with prices briefly touching $80 before easing. That initial calm was deceptive, as the conflict has dragged on, and we are now seeing Brent hold firm around $92 a barrel as of today, March 2, 2026. This shows the market has fully priced in a prolonged disruption rather than a short war.
The key factor remains the Strait of Hormuz, which has become practically impassable, disrupting a significant portion of global supply. Historically, this chokepoint handles over 20% of the world’s daily petroleum liquids consumption, and its closure has sent importers scrambling for alternative sources. This sustained supply shock is the main reason prices are nearly 40% higher than they were this time last year.
The economic consequences predicted for a longer war are now evident in the latest data. The Eurozone flash CPI for February 2026 came in at 3.5%, well above consensus and reversing the previous cooling trend, largely due to surging energy costs. This confirms that the conflict is now inflicting the painful economic drag on European growth that we had feared.
For derivative traders, this means upside risks will dominate the coming weeks, and we should be positioned accordingly. Implied volatility on Brent call options has remained elevated, with the Cboe Crude Oil Volatility Index (OVX) sitting near 48, reflecting market anxiety about another potential price spike. This suggests that buying protection against, or speculating on, higher prices is a prudent strategy.
We should look to options structures that benefit from a move toward the $100 per barrel mark, which now seems increasingly plausible. Buying May 2026 call spreads could offer a cost-effective way to gain exposure to this upside potential. All eyes will be on the next OPEC+ meeting in three weeks for any signal on production policy, as a failure to add barrels to the market would likely trigger the next move up.
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