Brent crude oil just posted its largest monthly gain in history. March 2026 will close with Brent up roughly 55% — surpassing even the spike during the 1990 Gulf War.
What happened
The Iran war, which began in late February, escalated sharply through March. Iran effectively closed the Strait of Hormuz, a narrow waterway through which about a fifth of the world's oil and gas normally flows. That single chokepoint knocked an estimated 9 million barrels per day off global supply, according to BloombergNEF.
Brent crude went from around $72.50 at the end of February to above $112 by late March, touching a high of nearly $120 — levels not seen since mid-2022. US crude (WTI) followed a similar path, gaining about 48% for the month.
A coordinated release of 400 million barrels from emergency reserves on March 11 barely dented the rally. And while President Trump's early attempts to talk prices down initially moved markets, his later statements — including a 10-day ultimatum for Iran to reopen the strait — were met with rising oil prices and falling stocks.
Why it matters
When oil moves this fast, it affects everything. Higher energy costs feed directly into transportation, manufacturing, and food prices. If sustained, $100+ oil raises the risk of a new inflation wave just as central banks were hoping the worst was behind them.
The ripple effects are already visible. The Dow Jones fell into correction territory last week, more than 10% off its record high. Asian shares are headed for their steepest monthly decline in years. Even gold — traditionally a safe haven — dropped about 15% in March, its worst month since 2008, partly because investors sold gold to cover losses elsewhere.
Turkey's central bank, for example, sold roughly 50 tonnes of gold (about $3 billion worth) to defend the lira, cutting its reserves significantly.
What to watch next
The situation hinges on two things: whether any ceasefire or de-escalation materializes in the coming days, and Friday's US nonfarm payrolls report, which will show whether the economic backdrop is holding up under the strain.
If the Strait of Hormuz stays restricted, oil could push higher. If diplomatic signals turn credible, a sharp reversal is possible — Schwab's derivatives strategist noted that a ceasefire would likely trigger a "substantial" stock rally given how oversold markets are.
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Bottom line
March 2026 will go down as one of the most volatile months in energy market history. Oil's record surge is reshaping the outlook for inflation, central bank policy, and global growth. The next few days — and any progress on the Iran situation — will determine whether this is a peak or just the beginning.