Iran: Will Oil Decide the Outcome? | The Global Story
•March 10, 2026
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Why It Matters
Escalating oil prices amplify inflation pressures worldwide and could force policymakers to intervene, making energy markets a decisive factor in the Iran conflict’s trajectory.
Key Takeaways
- •Oil prices hit four-year high amid Iran conflict
- •Strait of Hormuz shutdown threatens global oil supply
- •Iran threatens to halt all Gulf oil exports
- •War could push living costs higher worldwide
- •1970s oil crisis lessons inform current market response
Pulse Analysis
The recent surge in crude prices reflects how geopolitical flashpoints can instantly reshape energy markets. With the Strait of Hormuz—a chokepoint for roughly a fifth of global oil—facing near‑total closure, traders priced in a significant supply shortfall, pushing Brent and WTI to levels not seen since 2020. Analysts note that even a brief interruption can trigger a cascade of contract renegotiations, inventory draws, and heightened volatility, prompting investors to seek hedges and governments to reassess strategic petroleum reserves.
Historical parallels to the 1970s oil shock provide a useful lens for understanding today’s dynamics. Back then, OPEC’s production cuts and embargoes forced a dramatic price spike, prompting stagflation and a reevaluation of energy policy worldwide. The current conflict echoes those supply‑driven pressures, yet differs in the speed of information flow and the presence of diversified energy sources such as shale and renewables. Lessons from the 1970s—particularly the importance of demand‑side management and coordinated diplomatic responses—remain relevant as policymakers weigh sanctions, diplomatic channels, and potential military escalations.
For consumers, the ripple effect of higher oil and gas prices translates into increased transportation costs, higher food prices, and broader inflationary pressures. Emerging markets, heavily dependent on oil imports, may experience sharper currency depreciation and fiscal strain. Central banks could face a dilemma: tighten monetary policy to curb inflation or maintain accommodative stances to support growth. In this environment, stabilising oil markets becomes a strategic priority, with potential actions ranging from coordinated release of strategic reserves to diplomatic efforts aimed at de‑escalating the Iran‑Israel‑U.S. confrontation.
Original Description
Oil prices surged to a four-year high on Monday, before dipping after President Trump said the Iran war will end “very soon”. Just days ago, Trump said that he would not stop the war until Iran’s “unconditional surrender”. But how long will the Iran war last? And could oil be the deciding factor?
Turmoil in the region had led to the near complete shutdown of shipping traffic through the Strait of Hormuz, and Iran has reportedly said it will not allow “one litre of oil” to be exported from the Gulf if US-Israeli attacks continue. This has lead to rises in global oil and gas prices. How much impact is this going to have on the cost of living?
We speak to BBC economics correspondent Andy Verity about the lessons both the US and Iran might be learning from the oil crises of the 1970s, and ask whether oil could determine how and when the war ends.
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Chapters:
00:00 Is the price of oil what will decide the outcome of the Iran war?
01:32 How could the war affect oil and gas prices?
04.05 How could the war affect the the cost of living?
05:34 Is oil one of the main reasons for the war?
06:39 What is the significance of Kharg Island?
09:52 What happened during the 1970s oil crisis?
13:10 Is Iran using oil as a tactic in the war?
16:04 Is there less likely to be another oil crisis?
18:00 How can the markets be calmed?
21:27 Is the US insulated against oil price shocks?
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