Gold and oil prices may rise significantly due to increasing geopolitical tensions in the Middle East, with gold reaching new highs if the situation escalates and crude oil potentially strengthening from concerns over supply disruptions.
US military strikes on Iran are disrupting global energy markets and oil and gold prices are expected to rise dramatically when trading resumes Sunday night. The geopolitical risk premium in crude prices and the safe haven assets, is now a reality, as traders were anticipating a military confrontation between the largest oil consumer and one of OPEC’s top producers.
Following unprecedented US and Israeli assaults on Iran, Middle East tensions have heightened, raising concerns about potential disruptions to global energy supplies and leading investors to safe-haven assets.
On Friday, gold closed at $ 5278 and is expected to open with a big gap-up when trading resumes. Gold prices will be influenced by the severity of Iran’s retaliation and the spread of conflict, with potential for prices to reach all-time highs if the situation escalates, marking gold as the ultimate safe haven for global capital. On 01 Mar 2026, gold futures trades at $5296.4 up by 1.97%.
On Friday, before the United States and Israel launched coordinated military strikes against Iranian targets, Brent crude closed at $72.48 per barrel, and West Texas Intermediate closed at $67.02.
Some analysts expect that once Brent and WTI resume trading, the potential price gap could be the most extreme seen in oil markets since 2019.
Equirus Securities has warned that if escalation threatens the Strait of Hormuz, the geopolitical premium could embed a $20–40 per barrel spike, reopening a pathway toward $95–110+ per barrel — “well beyond the mechanical impact of Iran’s barrels alone.”
In 2024, about 20 million barrels of crude, condensate, and fuel products transited the Strait of Hormuz daily, representing nearly 20% of global liquid oil consumption, according to U.S. Energy Information Administration data.
A February survey of 34 economists and analysts estimated the geopolitical risk premium for crude oil to be between $4 and $10 per barrel. Barclays has indicated that Brent crude could reach $80 per barrel if there is a major disruption in supply. If conflict escalates or shipping lanes and Iranian exports are disrupted, oil prices could rise to $15–$20 per barrel, pushing Brent above $85 and WTI past $80.
A full blockade is considered a low-probability scenario with extreme consequences, as it would significantly impact Iran’s own oil exports, which have decreased to approximately 3.1 million barrels per day from 6 million before sanctions.
Iran, despite enduring four decades of sanctions, remains a top-ten global oil producer, with current output at approximately 3.1 million barrels per day, significantly reduced from around 6 million in the 1970s.
Iran’s crude oil extraction costs are low, at about $10 per barrel, aligning closely with Saudi Arabia, Iraq, Kuwait, and the UAE, and significantly lower than the $40 to $60 costs in Canada and the U.S.
More than 80% of Iran’s crude exports go to China. Disruptions in these exports due to strikes or sanctions could force China to seek alternative crude supplies in the spot market, thereby constraining global supply at a time when geopolitical tensions are increasing demand for crude oil.