US-Iran War, Strait of Hormuz Disruption, Stock Market Crash, Crude Oil Spike — The Week That Was
February 28 – March 7, 2026. Seven days. One war. And a global economy shaken to its core. The US-Israel military strikes on Iran — and everything that followed — produced the most turbulent week in financial markets since the COVID crash of March 2020. Oil posted its biggest weekly gain since futures began trading in 1983. The Dow had its worst week since April. The Strait of Hormuz — through which 20% of the world's daily oil flows — came to an effective standstill. Here is the full story, day by day.
Day 1 — February 28: The Strikes Begin
The 2026 Iran conflict began on 28 February 2026, with joint US-Israeli military strikes on Iran — including the assassination of Supreme Leader Ayatollah Ali Khamenei — involving millions of dollars in US military equipment and immediately exacerbating global economic uncertainties.
US crude jumped 7.5%. Brent crude, the international benchmark, spiked 6.2% to trade at around $77 a barrel, having briefly surpassed $82 earlier in the session. Oil prices had already been rising in anticipation of an attack on Iran. Stock futures fell sharply. Futures for the S&P 500, Nasdaq, and Dow were all down more than 1% — but defence stocks like Northrop Grumman and Lockheed Martin surged as investors rotated into conflict beneficiaries.
Day 2–3 — March 1–2: The Strait Goes Dark
Today's complete halt of oil flows through the Strait of Hormuz is unprecedented. "We have not seen anything like this in pretty much the history of the Strait of Hormuz," said Claudio Galimberti, chief economist at Rystad Energy, comparing it to blocking the aorta in a circulatory system.
The Strait of Hormuz is effectively closed for commercial shipping despite technically remaining open. Insurance withdrawal is doing the work that a physical blockade has not — the outcome for cargo flow is largely the same. This is a real supply disruption, not a risk premium event. Physical barrels are being affected across crude, products, LPG, and LNG simultaneously.
Stock markets experienced declines, with the Dow Jones Industrial Average falling over 400 points on March 2. Broader economic forecasts warned of inflationary pressures and slowed global growth if the conflict prolonged. Meanwhile, European natural gas markets surged more than 20%, though spot prices in the US remained within their recent range.
Goldman Sachs Speaks: The Market Is Pricing in a 4-Week War
According to Goldman Sachs' head of oil research Daan Struyven, the specific price point of Brent crude at $78 per barrel reveals exactly what traders are betting on: a disruption lasting about four weeks. Without sustained supply disruptions, Goldman Sachs estimates the fair value for Brent crude to be around $65 per barrel.
Struyven noted that the impact on oil prices is a "convex function" of the disruption's length — meaning the longer it lasts, the exponentially worse the price spike becomes. Compounding the danger is "trapped" spare capacity: while Saudi Arabia, UAE, and Kuwait hold the world's buffer barrels, those barrels must also flow through the Strait of Hormuz to reach global buyers — making them effectively useless in a full closure scenario.
Day 4 — March 3: Iran Widens the War
Oil prices leaped higher as Iran struck the US Embassy in Saudi Arabia, part of a widening of targets that also included areas critical to the world's oil and natural gas production. The price for a barrel of Brent crude briefly leaped above $84. The S&P 500 dropped as much as 2.5% in morning trading as worries grew that the war may do more sustained damage to the economy than feared.
Qatar's energy minister Saad al-Kaabi told the Financial Times that he predicts all Gulf energy exporters will be forced to shut down production, pushing oil prices even higher. This statement sent shockwaves through LNG markets globally — with Qatar being the world's second-largest LNG producer, the implications for European and Asian gas supply were immediate and severe.
Day 5 — March 5: Dow Crashes 785 Points
Stocks sank and oil surged to their highest level since mid-2024. The Dow closed lower by 785 points, or 1.61%, after briefly falling more than 1,100 points. The S&P 500 sank 0.56% and the tech-heavy Nasdaq fell 0.26%.
US crude oil prices jumped 8.5%, to just over $81 per barrel, posting their biggest single-day gain since May 2020. Brent crude climbed 4.93% to $85.41 per barrel. US crude and Brent prices gained more than 20% and 17% this week, respectively, as nerves persisted about disruptions to the flow of oil through the Strait of Hormuz.
"The market has been hoping that this will be short," said Rob Haworth, senior investment strategy director at US Bank Asset Management. "Iran continues to try and expand the sphere of conflict, and that could further dampen risk sentiment if it goes longer and broils more."
Day 7 — March 6–7: The Week Closes in Historic Fashion
US oil and Brent prices surged roughly 36% and 27% this week, respectively — the 36% surge for US oil is the biggest weekly increase since WTI futures started trading in 1983. Brent crude gained 8.5% on Friday alone to $92.69 per barrel. US crude surged 12.2% to $90.90 per barrel, its biggest single-day gain since May 2020.
The Dow finished the week lower by 3% — its worst week since April. The S&P 500 sank 2% — its worst week since October. Europe's Stoxx 600 index sank 5.55% this week, while Japan's Nikkei 225 dropped 5.5%. The 10-year Treasury yield surged to 4.14%, up from 3.96% on Monday — its biggest weekly surge since April.
"Investors have gone from complacency to the edge of panic. And we're about to have a panic moment," said Bob McNally, president of Rapidan Energy Group. President Trump added to the anxiety on Friday, posting on social media that "there will be no deal with Iran" except unconditional surrender — a statement that immediately sent oil prices higher and equity futures lower.
The Stagflation Warning Wall Street Cannot Ignore
"Add higher oil prices given conflict in the Middle East and renewed tariff uncertainty to the convoluted jobs market story, and you have a tricky, stagflationary mix of risks in the backdrop for the Fed," said Elyse Ausenbaugh, head of investment strategy at JP Morgan Wealth Management.
Analysts projected a potential global inflation increase of 0.8% if disruptions persisted, alongside rising risks of recession — particularly through prolonged closures of the Strait of Hormuz and key shipping routes connecting Asia to global energy markets. The IMF's World Economic Outlook — which projected 3.3% global growth for 2026 — was built on assumptions of energy stability that now look dangerously optimistic.
Who Won and Who Lost This Week
Winners: Energy stocks — ExxonMobil, Chevron, Shell surged as oil revenues projected to skyrocket. Defence contractors — Northrop Grumman, Lockheed Martin, Raytheon all posted strong weekly gains. Russian crude exporters saw their competitive position materially improve, with both India and China facing strong incentives to deepen reliance on Russian supply as Middle East flows dried up.
Losers: Airlines — United Airlines fell over 10% on the week as jet fuel surged 58%. Cruise lines — Carnival fell 5%+. Freight carriers — Old Dominion fell nearly 8%. And consumers everywhere — with US gasoline prices projected to rise 10 to 30 cents per gallon within days , and countries like India already hiking LPG cylinder prices by ₹60 per cylinder.
The Week in Numbers
- US Crude Weekly Gain: +36% — biggest since WTI futures began in 1983
- Brent Crude Weekly Gain: +27%
- Brent Crude Friday Close: $92.69 per barrel
- US Crude Friday Close: $90.90 per barrel
- Dow Jones Weekly Loss: -3% (worst week since April)
- S&P 500 Weekly Loss: -2% (worst week since October)
- Europe Stoxx 600 Weekly Loss: -5.55%
- Japan Nikkei 225 Weekly Loss: -5.5%
- 10-Year Treasury Yield: 4.14% (biggest weekly surge since April)
- European Natural Gas Surge: +20–76%
- Jet Fuel Weekly Spike: +58%
- Strait of Hormuz Daily Oil Flow: ~20 million barrels (20% of global supply)
- Goldman Sachs Fair Value for Brent (No Disruption): $65/barrel
- Potential Brent if Conflict Extends: $100+/barrel
What Comes Next: The 3 Scenarios to Watch
As this week closes, markets are watching three critical scenarios unfold in real time — and the path taken will determine whether this is a temporary shock or a structural economic crisis:
- Best Case: Conflict is contained within 2–4 weeks. Strait of Hormuz reopens. Brent settles back to the $70–80 range . Markets recover. Global recession avoided.
- Middle Case: Conflict extends 6–8 weeks. Partial Hormuz disruption persists. Brent holds above $90. Stagflation becomes the dominant economic narrative. Fed caught between inflation and recession.
- Worst Case: Full Strait closure for months. Saudi production facilities hit. Brent surges well above $100 . Global recession guaranteed. Emergency SPR releases and OPEC+ spare capacity prove insufficient. A 1970s-style stagflation crisis materialises.
As Reuters noted, "The stock market is becoming increasingly vulnerable to turmoil in the Middle East, making the path of least resistance lower," according to Craig Johnson, chief market technician at Piper Sandler.
Conclusion: A Week That Changed Everything
The week of February 28 – March 7, 2026 will be studied in economics and geopolitics classrooms for decades. In seven days, the world witnessed the death of Iran's Supreme Leader, the effective closure of the Strait of Hormuz, the largest weekly oil price surge since 1983, a global stock market selloff, and the return of stagflation fears not seen since the 1970s.
The next seven days will be equally critical. Follow live market updates from CNN Markets, Bloomberg Markets, and Fortune Finance — and keep a close eye on the US EIA's Short-Term Energy Outlook for the most authoritative oil supply data as this crisis continues to evolve.
