12OCT

Brent at $112 as Houthis enter the war

2 min read

10:59UTC

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.

← Back to US licenses Russian diesel and turns on Kyiv Jump to analysis ↓

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

Read original →

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

Read story →

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

Read story →

Different Perspectives

Government of Latvia

Latvia abstained on 22 September when the EU renewed its individual sanctions for 36 months at the price of delisting Alisher Usmanov and Mikhail Fridman, and promised national sanctions of its own. Riga's abstention marks how far a frontline member state will go to keep listed names listed.

India's Ministry of External Affairs

After the House passed the Graham bill on 16 September, India's foreign ministry said it would keep buying energy on market terms and protect its trade. Russia supplied 30.3% of India's crude imports in fiscal 2026, so the tariff decision due around 18 October falls directly on New Delhi.

Kaja Kallas, EU foreign policy chief

Kallas answered the US licence on 10 October by saying Europe would not ease pressure, and EU ministers adopted a 22nd package of nearly 1,600 listings two days later. Brussels is tightening as Washington loosens, though TASS reported the package adds no significant new trade restrictions.

Donald Trump and the US Treasury

The Treasury licensed Russian diesel imports until 7 April 2027 on the day of Trump's call with Putin, and Trump then told reporters Ukraine should find a new leader. Washington is trading sanctions relief for fuel supply while pressing Kyiv to halt the refinery strikes behind the shortage.

Kremlin and Deputy Prime Minister Alexander Novak

After the 9 October call the Kremlin said Russia was ready to supply oil and petroleum products to American and global markets, and Novak brought forward the end of diesel export curbs. Moscow is selling the shortage back as goodwill, with volumes that Decree No. 686 now hides from outside checks.

Volodymyr Zelenskyy, President of Ukraine

Zelenskyy called GL 135 an investment in prolonging the war and offered to stop striking Russian refineries if Russia stops destroying Ukraine's energy system. Answering Trump's call for a new leader, he set a total 60-day ceasefire as the condition for elections, which puts the next move on Moscow.