23JUL

Brent at $112 as Houthis enter the war

2 min read

19:27UTC

Oil climbed 4.2% to $112.57 as the Houthi attacks added a second chokepoint threat to a market already pricing in near-total Hormuz closure.

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ConflictAssessed

Key takeaway

Brent's 51% monthly gain reflects dual-chokepoint risk not yet fully priced by markets.

Brent Crude settled at $112.57 on 28 March, up $4.56 (4.22%), driven by Houthi entry into the conflict⁠¹. WTI crossed $100 for the first time since the Houthi escalation began. The monthly gain of approximately 51% is the largest single-month increase since the COVID recovery in mid-2021. Goldman Sachs estimates a $14 to $18 per barrel geopolitical risk premium is already baked into the price.

The Majlis Hormuz toll bill is expected to be finalised this week. Passage would embed Hormuz control in Iranian domestic law, making it constitutionally harder for any future negotiator to concede the point. The de facto $2 million per-voyage toll is already operational, denominated in Chinese yuan, with refusal to pay triggering boarding by IRGC naval forces. IEA demand destruction (growth revised down 210,000 barrels per day) suggests the price surge is partly offset by recession-driven demand collapse.

Deep Analysis

In plain English

Oil has risen 51% in 29 days, from about $67 per barrel before the war to $112.57. For comparison, petrol in the UK is now roughly £3.50 to £3.70 per litre where it was under £2.20 before the conflict. The immediate driver is the near-total closure of the strait of Hormuz, through which 20% of the world's oil normally flows. The Houthi entry into the conflict on 28 March added another 4.22% to the price in a single day. The Iranian Parliament is expected to pass a law this week making the Hormuz toll permanent under Iranian domestic legislation. If it does, markets will likely price in a longer-term disruption, pushing prices higher still.

Source Landscape

This story draws on centre-left-leaning sources from United States

United States

Primary parallel: The 1973 Arab Oil Embargo produced a 300% price increase in five months. The current 51% increase in 29 days is faster in velocity but remains lower in absolute terms. Both events triggered recessions in oil-importing economies.

Counter-parallel: In 1973, the US had no domestic shale production; the energy transition had not begun; and there were no strategic petroleum reserves of comparable scale. The IEA's 400 million barrel release is a buffer the world did not have in 1973.

Brent's 51% monthly gain represents the largest single-month increase since mid-2021. The Majlis toll bill, expected to pass this week, would embed a $2 million per-vessel toll structure in Iranian domestic law. Passage would likely trigger a further market repricing as the duration premium on the disruption extends.

At $112.57 per barrel, UK retail petrol prices are approximately £3.40 to £3.70 per litre depending on refinery margin assumptions. Goldman Sachs's $14 to $18 geopolitical risk premium implies the underlying commodity cost would fall to $94 to $98 if the conflict ended tomorrow. The IEA's demand revision of -210,000 b/d signals early recession pressure that may widen if prices remain elevated through May.

Consensus view: Goldman Sachs commodity research and JP Morgan energy strategy desks both identify a $14 to $18 per barrel geopolitical risk premium in current Brent pricing above fundamentals, noting that markets are not yet pricing the full demand-destruction scenario because the war's duration remains uncertain.

Counter-view: Saudi Aramco's investment committee and OPEC Secretariat economists warn that the recession signal in IEA demand data (-210,000 b/d revision) may accelerate faster than the geopolitical premium sustains; a demand-driven price collapse could occur simultaneously with supply disruption.

Key tension: Whether the Majlis Hormuz toll bill passage this week, converting de facto IRGC control into domestic law, will force markets to price in a permanent rather than temporary Hormuz disruption, triggering the next price surge.

Sources:CNBC

Mentions:Strait of Hormuz →Iran →Islamic Revolutionary Guard Corps (IRGC) →International Energy Agency →Majlis →Saudi Aramco →Goldman Sachs →Chinese yuan →1973 Arab Oil Embargo →

First Reported In

Update #51 · Iran hits aluminium plants; Hormuz emptying

CNBC· 29 Mar 2026

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Causes and effects

Caused by

Brent at $112 as Houthis join the war

Brent's 4.22% surge to $112.57 reflects the compounding economic impact of Houthi entry into the conflict adding demand-side uncertainty.

Occurred 28 Mar 2026

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This Event

Brent at $112 as Houthis enter the war

Brent's 51% monthly gain is the largest since the COVID recovery in mid-2021, and the Majlis Hormuz toll bill expected this week could convert the de facto closure into permanent law.

Led to

Brent above $116, set for record month

Brent at $112.57 on 28 March (ID:1695) advanced further to above $116 by 30 March, driven by Trump's oil seizure statement and the third consecutive Houthi attack on Israel.

Occurred 30 Mar 2026

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Different Perspectives

Wang Yi

China's foreign minister and Djibouti's issued a joint communique on 21 October saying the war should not reach the Horn of Africa and stressing free navigation through Bab al-Mandeb. The text names neither Iran nor the Houthis, and Djibouti hosts China's only overseas military base, opposite the Yemeni coast.

Ministry of External Affairs

India's foreign ministry called the attacks on Saudi civilian and energy sites "unacceptable" on 22 October and said they must stop at once. An Indian died at Dammam, Indians were injured there and at Shaybah, and about 4,000 Umrah pilgrims remain stranded by one MP's count.

Iraq

Iraq closed the al-Sheeb crossing with Iran to travellers and trucks from 21 October and said other crossings would close gradually. Unlike September's closure, which ended on a staged timetable, this one has none, and Iran's interior ministry said it received no notice.

Abdel Fattah el-Sisi

Egypt's president said on 21 October that Cairo's support would "defend Saudi territory, and does not include an attack on Yemen". Araghchi warned that Egyptian involvement would further complicate the situation, and Cairo's limit matches the one Ankara set on 8 October against attacking another state's soil.

UK Ministry of Defence

The MoD said on 20 October that RAF Typhoons over Saudi Arabia will not strike the Houthis, but extended tanker support to Saudi operations including against Houthi targets in Yemen. The tanker line sets no limit on strikes, so British aircraft may now refuel Saudi jets on bombing runs.

Turkey

Ankara sent the Mecca Joint Defence Agreement to parliament around 20 October, and its published text treats an attack on one party as an attack on all. Article 16 brings it into force only on the last ratification, so the 5 October invocation in Riyadh could not yet bind Turkey.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.