Increase in Prices

In light of current events, oil prices have been on the rise hitting record highs since October 2025. According to Forbes, Brent crude hit its highest level since October 2025, rising 1.2% to USD 66.2 a barrel. 

Iran holds about 12% of the world’s oil reserves. Additionally, it currently exports between 1.5 million and 2 million barrels per day, primarily to China. Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC). It extracts about 3.3 million barrels per day (bpd) of crude oil and another 1.3 million bpd of condensate and other liquids.

Impact on US Economy

An oil price shock should lead to negative consequences in the US market and economy. According to Business Insider, higher energy prices could stoke inflation and thus limit economic growth. This could mean the Federal Reserve would have less leeway to cut interest rates down.

Past Pressures on Oil

During the Strait of Hormuz issue in 2025, the simple threat of disruption is often enough to cause an increase in prices. 

The strait is critical to global energy shipments as 20% of global oil and 20% of liquefied natural gas (LNG) flow through it. On a daily basis, 20 million barrels of crude, condensate, and fuels flow via the waterway. At the time, it was estimated that a disruption could push oil prices up to USD 120 per barrel.

Global Impact

Despite no current disruption in Iranian oil exports, many do rely on these supplies, and even the mere possibility can impact economies. 

China, which imports about 90% of Iranian oil, relies on these supplies to meet part of its needs. However, any decline in Iranian production would force China to increase purchases of liquefied natural gas (LNG) from global markets, putting pressure on prices, especially in Europe.

Analysts at Citi increased its near term Brent crude forecast, lifting its 0-1 month price target from USD 65/barrel to USD 70/barrel. The revision comes after Brent rose from around USD 60–61 a barrel last week to the mid-USD 60s.

Even without production halts, oil markets are pricing in supply risks, driving higher prices and market volatility. For now, the world is monitoring supply risks that could impact everything from fuel prices to global supply chains and everyday consumer costs.