People queue at a petrol station in Istanbul on Mar 6, 2026 as fears have grown of a possible inflationary wave as war in the Middle East sends energy prices shooting upwards. (Photo: AFP/Yasin AKGUL)

Oil prices surge to highest since 2023 as Middle East war rages, stocks fall on US jobs

The price for a barrel of Brent crude, the international standard, jumped 8.5 per cent as the US-Israel war upended the world's energy and transport sectors.

06 Mar 2026, 21:45 · CNA · Join

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Oil prices shot to their highest since 2023 after surging again on Friday (Mar 6) because of the Iran war, and a weak update on the US job market knocked stocks lower to cap Wall Street’s worst week since October.

The US-Israel war on Iran and Tehran's retaliatory attacks across the Gulf region have upended the world's energy and transport sectors, virtually halting activity in the Strait of Hormuz.

The price of Brent crude, the international standard, surged to US$92.69 per barrel, up 8.5 per cent for the day and nearly 30 per cent for the week, after US President Donald Trump said only the "unconditional surrender" of Iran would end the Middle East war.

It briefly rose above US$94 to touch its highest level since September 2023.

The main US contract West Texas Intermediate, meanwhile, breached the US$90 level for the first time since 2023 and jumped 12.2 per cent to US$90.90.

Oil prices have surged, with Brent up from near US$70 late last week, as the war has expanded and included areas critical to the production and movement of oil and gas in the Middle East. Much will depend on what happens with the Strait of Hormuz off Iran’s coast, where roughly a fifth of the world’s oil typically sails.

If oil prices spike further, to US$100 per barrel, and stay there, some analysts and investors say it could be too much for the global economy to withstand.

Market reaction to the conflict had been tempered by hopes that it would be short, but Trump's demand for Iran's capitulation has raised fears of a long conflict.

The prospect of high energy prices for a sustained period has fanned concerns of a fresh spike in inflation that could hit the global economy while curbing the ability of central banks to cut interest rates to prop up growth.

"The longer that key energy infrastructure and shipping routes in the region are affected, the greater the chance of a significant inflationary impact," said AJ Bell investment director Russ Mould.

Attacks on oilfields were reported in southern Iraq and in the northern autonomous Kurdistan region, which forced a US-run oil field to shut production. Kuwait has also begun cutting production due to a lack of petroleum storage capacity, the Wall Street Journal reported.

Earlier this week, Trump pledged to protect ships through the Strait of Hormuz, but shipping companies have exercised caution in the region.

Trump's pledge helped "reduce some of the risk premium in oil markets", but will have "limited impact unless Iran's extensive disruption capabilities are first neutralised", said a note from analysts at JPMorgan Chase.

Meanwhile, data showed the US economy had unexpectedly lost jobs in February, while unemployment also edged up.

The world's biggest economy shed 92,000 jobs last month, down from revised job growth of 126,000 in January, said the Labor Department.

New data released Friday also showed US retail sales had fallen by 0.2 per cent in January.

Investors often look at data showing a slowdown in the economy as raising the chances of the US Federal Reserve lowering interest rates. But analysts have said higher oil prices complicate that picture.

Until recently, the markets were anticipating the Fed would resume interest rate cuts in June, but that has now shifted to September.

Wall Street's main indices finished down around 1 per cent or more.

“You can’t sugarcoat this report,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management. “A negative payrolls number combined with a big jump in oil prices will have traders worrying about stagflation risks.”

Stagflation is what economists call the miserable mix of a stagnating economy with high inflation.

Europe's main markets, which had earlier shown only small losses, finished the day with losses of around 1 per cent.

An exception to Friday's selloff was Boeing, which piled on 4.1 per cent following a Bloomberg report that said the company was close to a big sales agreement with Chinese carriers.

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