Oil Prices Surge After US–Israel Strikes on Iran, Trim Gains Amid OPEC+ Output Increase
Singapore, March 2, 2026: Oil prices surged sharply in Asian trading on Monday after military strikes by the United States and Israel on Iran heightened fears of supply disruptions and intensified geopolitical tensions. However, crude prices later pared early gains after the Organization of the Petroleum Exporting Countries and its allies announced a production increase aimed at stabilising global supply.
Brent crude futures initially jumped 13% to $82 per barrel before easing to trade 4.5% higher at $76.27 per barrel. Meanwhile, West Texas Intermediate (WTI) crude rose 2.7% to $66.89 per barrel, reflecting ongoing volatility in global energy markets.
Military strikes and retaliation raise supply concerns
The United States and Israel carried out coordinated strikes on Iran over the weekend, reportedly killing hundreds, including Iran’s Supreme Leader Ali Khamenei and several senior officials. The attacks marked a major escalation in tensions tied to Tehran’s nuclear programme.
Iran responded by launching missile strikes targeting Israel and several US-aligned countries in the region, including Bahrain, Kuwait, Qatar, and the United Arab Emirates. Iranian forces were also reported to have attacked oil tankers passing through the strategic Strait of Hormuz, raising concerns about immediate disruptions to global oil supplies.
Analysts at ANZ said the tanker attacks significantly increased supply risks, noting that roughly 20% of global oil consumption passes through the critical waterway.
US signals continued military action
US President Donald Trump said military operations against Iran could continue in the coming days, warning of further casualties. The latest strikes mark Washington’s second major military operation against Tehran since mid-2025, following earlier attacks on Iran’s nuclear facilities aimed at limiting its nuclear capabilities.
The escalation follows the collapse of recent negotiations between Washington and Tehran, which ended without a breakthrough agreement.
OPEC+ production increase limits price surge
Separately, the OPEC+ alliance agreed to increase oil production by 206,000 barrels per day during a meeting on Sunday. The move is intended to offset potential supply disruptions caused by the conflict, although uncertainties remain over whether member countries will fully implement the increase.
The production hike marks OPEC+’s first such move since late 2025, as the group seeks to regain market share and maintain supply stability. The organisation had already increased output by approximately 2.5 million barrels per day throughout 2025 before pausing production adjustments in November.
Market outlook remains uncertain
Despite the production increase, continued military tensions and risks to shipping routes have kept oil markets on edge. Analysts warn that further escalation in the conflict could lead to sharper price swings and prolonged uncertainty in global energy markets.