Oil Prices Surge Near $78 Per Barrel As Middle East Conflict Disrupts Supply

Global crude oil prices climbed close to 78 dollars per barrel on March 5, as growing Middle East conflict raised fears of supply disruptions. Israel and Iran have pushed oil prices sharply higher, adding a 'war premium' to global crude markets.

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Oil prices rise sharply as Middle East tensions grow

Global oil prices climbed strongly on Thursday as the ongoing conflict in the Middle East raised fresh concerns about the stability of energy supplies. Investors are closely watching the situation because any disruption in the region could affect the flow of crude oil to international markets.

West Texas Intermediate (WTI) crude oil futures jumped by more than three percent and moved close to 78 dollars per barrel, one of the highest levels seen since January 2025.

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Crude oil price on March 5

Crude oil was trading at 77.94 dollars per barrel on March 5, 2026, marking a 4.39 percent increase compared to the previous day.

The rise reflects growing worries among investors about the security of oil supplies, especially as tensions between countries in the Middle East continue to escalate.

Over the past one month, crude oil prices have surged by 22.64 percent. Compared to the same time last year, prices are 17.45 percent higher, showing a strong upward trend in the energy market.

Historically, crude oil once reached an extremely high level of 410.45 dollars per barrel in December 2025, according to trading data based on contracts for difference that track the global benchmark market.

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Middle East conflict affecting oil supply

The latest jump in prices is largely linked to the growing conflict involving several countries in the Middle East. The region plays a key role in global oil production, and even small disruptions can have a major impact on supply.

Investors fear that the situation around Iran and other Gulf countries could worsen, which may limit oil exports from the region.

These concerns have kept global markets tense, with traders carefully following every development related to the conflict.

China halts fuel exports

Another factor adding pressure to the oil market is China’s decision to stop exports of diesel and gasoline from its major refineries.

The Chinese government reportedly took this step as tensions in the Persian Gulf continue to rise. By keeping more fuel within the country, China may be preparing for possible supply disruptions.

This move has further increased worries in global energy markets.

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Strait of Hormuz shipping disruption

Shipping through the Strait of Hormuz has also been affected by the conflict.

The narrow waterway is one of the most important oil routes in the world. A large share of global crude oil shipments passes through it every day.

Reports suggest that shipping activity in the area has been disrupted due to rising security risks. Any major blockage in this route could quickly push oil prices even higher.

Efforts to calm market fears

Governments and industry groups have tried to reduce concerns in the oil market. Some proposals include providing insurance for oil tankers and offering naval escorts for vessels travelling through risky waters.

However, these steps have not yet been enough to reassure investors. Many traders remain cautious because the conflict could last longer than expected.

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US crude inventory provides some relief

Despite the strong price rise, there was one piece of news that helped balance market fears.

Data from the US Energy Information Administration (EIA) showed that American crude oil inventories increased by 3.5 million barrels, bringing total stockpiles to 439.3 million barrels.

The increase was much higher than market expectations and suggests that the United States currently has a stronger supply buffer.

This additional stock may help soften the impact if global supply disruptions worsen in the coming weeks.

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How rising crude prices could hit India's growth and inflation

India’s economy could face pressure if global crude oil prices keep rising. According to SMC Global Securities’ Vandana Bharti, every $10 increase in oil prices may reduce India’s GDP growth by about 0.5%. With nearly half of India’s crude imported from the Middle East, tensions near the Strait of Hormuz could disrupt supply, raise inflation, weaken the rupee and slow economic activity across sectors.

How Middle East tensions are a serious risk for India's economy

Rising tensions involving the US, Israel and Iran have pushed oil prices sharply higher, adding a “war premium” to global crude markets. Analyst Vandana Bharti warns India is vulnerable because about 50% of its crude oil comes from the Middle East. Higher shipping costs, insurance premiums and supply uncertainty could hurt economic stability, trigger inflation and affect currency and financial markets.

What rising oil prices mean for India's economy and energy Security

Crude oil prices jumped from around $69 to nearly $78 per barrel within a week amid Middle East tensions. If the crisis continues, prices could reach $85-$87, according to market experts. India has emergency reserves for around 25-30 days, but supply disruptions could still hurt Asian economies, raise fertiliser costs and increase pressure on India’s economic growth.

(With ANI inputs)