U.S. oil prices have head for the hills since teeing off a fresh conflict in Iran last weekend, spurring one of the largest one-week increases in domestic oil prices ever.
With the market week drawing to a close, Crude Oil is sitting at $91.33, up 28.3% over the past five days. That’s the highest prices that have been seen since 2023.
The market could be fixing to go higher too, as the Strait of Hormuz, a critical passing for global commodities, remains interrupted by the crossfire.
But as if the rapid steepening wasn’t already unprecedented, it stands to get worse. Qatar’s Energy Minister Saad al-Kaabi told Financial Times on Friday that Gulf states could shut oil exports altogether, introducing new chaos.
Then, there’s a world where nightmare prices could follow as oil benchmarks sprint above $100/barrel, potentially up to $150 or $200.
And consider, the price of all products dependent on oil product are already somewhere on a scale from “getting expensive” to “superbly expensive”, per Sparta Commodities’ June Goh:
Status as of 6 Mar 9 pm Singapore time:
1⃣Jet fuel : superbly expensive
2⃣Diesel : very expensive
3⃣Gasoline : getting expensive
4⃣Fuel oil : normally cheaper than crude, but not anymore
5⃣ Crude price : Touching 90$/bblWhat it means for holiday plans:
1⃣Shouldn't fly… pic.twitter.com/cU22VoD2DM— June Goh (@JuneGoh_Sparta) March 6, 2026
This is why traders are carefully watching oil markets and energy stocks. But their focus is broadening as they weigh another externality of the Strait’s closure.
It turns out, it’s not just oil. It’s chemicals. And absent a prompt cessation of the conflict, we might all be worrying about something bigger than what we pay at the pump.
Fertilizer shortage incoming?
The Strait of Hormuz’s closure isn’t just bad news for oil; it could also be bad news for global food security.
Critical ingredients used in fertilizer, such as urea, sulfur, ammonia, and phosphates are produced around the region and pass through the Strait. It is usually around this time of year that those shipments would be making their way to their destination for Spring planting, but instead, they are effectively blockaded.
In other words, right now is a catastrophic time for this essential transit corridor to be shut. The fallout could result in weaker yields on important crops like corn, wheat, and rice. These crops are highly dependent on fertilizer application.
U.S. investors seem to have already squared that possibility on Friday. Among thew few companies which rose in the S&P 500 were CF Industries Holdings (+5.08%), which has a sizable fertilizer business and was the index’s best performer.
Bunge Global (+3.14%) and Archer Daniels Midland Co (+1.37%), also with some exposure to the fertilizer biz, also were among the few equities in the green.
Fear of inflation returns
Higher oil prices, higher fertilizer prices, higher crop prices? You can put the pieces together in your mind for where this is going, absent taking the off-ramp at full speed.
A nightmare situation for the Federal Reserve could be panning out, just as it seemed to be in the homestretch of bringing inflation to keel. And paired with today’s abysmal payrolls, you could see how the central bank might be faced with worries about reaccelerating inflation and higher unemployment.
That’s bad news for President Donald Trump and new Fed Chair appointee Kevin Warsh. Despite guarantees of escorts and insurance for ships transiting the Strait, oil prices continue to climb. And the longer the Strait remains disrupted, the more it threatens to affect agricultural commodities.
And if history is any indication, the 48-to-72-hour operation in Iran is starting to look a lot more like a weeks-long or even months-long undertaking. The word “war” is starting to come up a lot more.
To that end, traders should prepare for this week’s shock to continue.
#It039s #rising #oil #prices #you039ll #worry #Iran #conflict #continues