Global oil prices surged above $100 per barrel on Thursday after fresh attacks linked to Iran targeted oil storage facilities in Oman, offsetting the expected market relief from a record emergency oil release announced a day earlier.

Benchmark Brent crude climbed sharply during trading, briefly moving above the $100 mark before easing slightly. Prices still remained significantly higher than earlier in the week, reflecting continued volatility in global energy markets.

The spike came despite an unprecedented move by the International Energy Agency, which on Wednesday announced a coordinated release of 400 million barrels from emergency stockpiles held by its 32 member countries. The measure is the largest such release in the agency’s history and more than twice the volume deployed after the Russian invasion of Ukraine in 2022.

Shortly after the announcement, Iranian forces launched drone strikes targeting fuel storage tanks and silos at the Salalah Port, triggering fires that local authorities were still working to contain late Wednesday.

British maritime security firm Ambrey confirmed damage at the site, while Danish shipping company Maersk temporarily suspended port operations as a precaution.

Omani officials said the attacks had not disrupted domestic fuel supplies, though investigations into the incident were continuing. Iranian state media reported that President Masoud Pezeshkian assured Haitham bin Tariq that the events would be examined.

The security situation also worsened at sea. At least six vessels were reportedly struck in the Persian Gulf and the Strait of Hormuz, including a container ship hit by a projectile near the United Arab Emirates and two tankers damaged in waters near Iraq. Monitoring groups such as UK Maritime Trade Operations attributed the incidents to Iranian forces or allied groups.

Since the start of the conflict, at least 16 ships have reportedly been struck in the region, intensifying concerns about the security of global energy supplies.

The Strait of Hormuz normally carries about one-fifth of the world’s oil shipments. However, analysts estimate that exports of crude and refined products from the region have fallen to just 10–15 percent of pre-war levels as shipping traffic declines sharply.

In response to the crisis, several countries are contributing to the IEA’s coordinated reserve release. The United States alone plans to supply 172 million barrels, while Germany, France and Italy have also confirmed they will tap emergency stockpiles. Japan said it will begin releasing oil next week.

IEA executive director Fatih Birol described the crisis as an oil market disruption “unprecedented in scale,” saying the coordinated action reflects strong cooperation among major energy-consuming nations.

Despite the intervention, analysts say the reserve release may have limited impact if the disruption to supply continues. Warren Patterson, head of commodities strategy at ING, said the release could not fully offset the roughly 15 million barrels per day currently affected by the conflict.

Economists also warn that prolonged disruptions could push oil prices significantly higher. Analysts at Oxford Economics said crude prices could approach $140 per barrel if tensions persist, a level that could trigger a mild global recession.

Kristalina Georgieva, managing director of the International Monetary Fund, has warned that sustained increases in oil prices would likely push global inflation higher and slow economic growth worldwide.

Energy markets remain focused on developments in the Strait of Hormuz, with analysts saying the restoration of normal shipping routes will be critical for stabilising oil prices in the coming weeks.

Economists say the surge in global energy prices linked to the conflict with Iran could push inflation higher across the eurozone, increasing the possibility that the European Central Bank may be forced to raise interest rates in 2026.

Oil markets experienced one of their sharpest reversals on record this week after comments from Donald Trump suggested the US-led military campaign against Iran might soon wind down. The statement briefly eased fears of a prolonged disruption to energy supplies moving through the Strait of Hormuz, a critical shipping route for global oil.

Speaking during a press conference, Trump said the United States and Israel had made rapid progress in military operations against Iran and insisted Washington would act to keep international energy routes open.

“Oil supplies will be dramatically more secure,” Trump said, adding that the US could escort oil tankers through the Strait of Hormuz if necessary. When asked whether the conflict might end soon, he responded that it could be resolved within days.

Energy markets reacted quickly to the remarks. West Texas Intermediate crude, which had climbed to about $119 per barrel during heightened concerns over potential shipping disruptions, fell to below $90 by the end of the trading session, representing a drop of more than $30 in less than a day.

Despite the dramatic fall in crude prices, economists warn that retail fuel costs in Europe have not yet reflected the change. Fuel prices across several major cities remain elevated, highlighting the delay between movements in wholesale oil markets and prices paid by consumers.

According to data from fuel tracking platform Fuelo, petrol prices remain high across major European cities. In Milan, unleaded fuel is selling for around €1.89 per litre while diesel has climbed to €2.10. In Paris petrol costs about €1.92 per litre and diesel roughly €2.06. Frankfurt currently records the highest prices among the three, with petrol reaching €2.12 per litre and diesel at €2.19.

Economists say the biggest economic channel through which the conflict affects Europe is energy. Sven Jari Stehn, chief European economist at Goldman Sachs, said most European economies rely heavily on imported oil and gas, making them particularly sensitive to price shocks.

The bank estimates that a 10 percent increase in oil prices typically raises eurozone inflation by around 0.3 percent. Analysts caution that the effect could be stronger if natural gas prices also rise, as gas markets often react differently from oil.

Analysts at Bank of America outlined several potential scenarios depending on how long energy prices remain elevated. In a moderate scenario, crude stabilises near $80 per barrel while European gas prices remain elevated for several months. Under that outcome, eurozone inflation could briefly climb to about 2.5 percent before gradually declining later in the year.

A stronger energy shock would have more serious consequences. Economists warn that inflation could exceed 3 percent during the second quarter while economic growth slows.

Michael Saunders, an adviser at Oxford Economics, said central banks can no longer ignore energy-driven inflation in the way they sometimes did in the past. He argued that policymakers are increasingly concerned that rising energy costs could feed into broader inflation expectations across the economy.

Financial markets are already adjusting their expectations. Data from prediction platform Polymarket suggests investors now see a significantly higher chance that the European Central Bank may raise interest rates in 2026 if energy prices remain elevated.

The ongoing conflict involving Iran is sending economic shockwaves across global markets, pushing up energy and fertiliser prices and raising fears of food shortages in vulnerable countries. Economists warn that the disruption is also complicating efforts by central banks to control inflation.

At the center of the crisis is the Strait of Hormuz, a strategic shipping corridor through which roughly one-fifth of the world’s oil supply normally passes. The route has effectively been shut since military strikes by the United States and Israel against Iran began 11 days ago, triggering widespread concern in global energy markets.

Oil prices have surged sharply since the conflict escalated. Crude traded below $70 per barrel in February but climbed to nearly $120 earlier this week before easing to around $90. The rise in crude prices has pushed gasoline costs higher as well. According to the American Automobile Association, the average price of gasoline in the United States jumped to $3.48 per gallon from just under $3 only a week earlier.

Economists say the impact could be even greater in regions that rely heavily on Middle Eastern energy supplies. Countries in Europe and Asia depend more on imported oil and gas from the Gulf than the United States, making them particularly vulnerable to supply disruptions.

Kristalina Georgieva, managing director of the International Monetary Fund, warned that sustained increases in oil prices could have broader economic consequences. She said every 10 percent rise in oil prices that lasts most of the year could push global inflation up by 0.4 percent while reducing worldwide economic output by up to 0.2 percent.

Economists stress that reopening the Strait of Hormuz is essential to restoring stability. Simon Johnson of the Massachusetts Institute of Technology said about 20 million barrels of oil pass through the waterway each day. He noted that global producers have little spare capacity to replace that volume if shipments remain blocked.

Despite the shock, some analysts believe the global economy may still manage to absorb the disruption if the conflict proves short-lived. Eswar Prasad, a trade policy professor at Cornell University, said the world economy has previously shown resilience after major shocks such as the Russian invasion of Ukraine and sweeping tariff measures introduced in 2025.

The war is already creating uneven economic effects across countries. Major energy importers including Japan, India, China and several European economies face higher costs as oil prices climb. Oil producers outside the conflict zone such as Norway, Russia and Canada could benefit from higher export revenues.

Some nations face particularly severe challenges. Pakistan imports about 40 percent of its energy and relies heavily on liquefied natural gas shipments from Qatar, supplies that have been disrupted by the conflict.

The crisis is also affecting global agriculture. Researchers at the International Food Policy Research Institute estimate that up to 30 percent of the world’s fertiliser exports pass through the Strait of Hormuz. Disruptions to shipments of products such as urea, ammonia and phosphates are already pushing costs higher for farmers.

Experts warn that higher fertiliser prices may eventually translate into rising food costs worldwide. Low-income countries with fragile agricultural systems are expected to face the greatest risk of shortages if the disruption continues. Central banks are now confronting a difficult choice between raising interest rates to curb inflation or easing policy to support economic growth as the crisis unfolds.