When U.S.-Israel strikes killed Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday, February 28, 2026, oil markets didn’t just move, they lurched. Brent crude, which had already climbed to $73 per barrel on Friday, its highest since July, jumped a further 10% to ~$80 per barrel in over-the-counter trading on Sunday. (Source: Reuters) Because futures markets are closed over the weekend, OTC trades between major counterparties were the only read on where the market stood, and the message was unambiguous.
By Monday, global crude prices had officially settled up 9–10%, and Abu Dhabi’s flagship crude, Murban, found itself at the epicentre of one of the sharpest geopolitical repricing events in years. (Source: Reuters)
By early March, spot premiums for Murban crude futures over Dubai swaps spiked to around $6.52 per barrel, the highest in more than three years and a stark signal that markets were repricing risk at one of the world’s most critical energy chokepoints. (Source: Reuters)
The Escalation That Shook Energy Markets
Iranian retaliatory attacks immediately raised fears for commercial shipping through the Strait of Hormuz, through which more than 20% of global oil supply transits daily. (Source: Reuters) Within 24 hours, at least 150 vessels had dropped anchor in surrounding waters. (Source: Reuters) Tehran warned ships against transit, prompting tanker owners, oil majors, and trading houses to suspend shipments. (Source: Reuters)
Saudi Arabia and the UAE raised exports to offset feared Hormuz losses partially, but with the Strait accounting for over a fifth of all global oil, no pipeline bypass can fully replace its capacity if flows are halted for more than a few days. (Source: Reuters)
The physical market moved faster than paper. Cash Dubai’s premium surged from $1.15/bbl on Friday to $5.91 on Monday. The prompt Dubai spread widened to $3.25/bbl backwardation from just 52 cents on Friday. (Source: Reuters) Saudi Aramco shut its 550,000 bpd Ras Tanura refinery after a drone attack; missiles struck four vessels; six major shipping companies halted or diverted sailings. (Source: Reuters)
The $7–10 Risk Premium: Fragile or Durable?
Even before this weekend’s escalation, analysts had been tracking a growing risk premium embedded in oil prices. With Brent hovering near $71 per barrel year-to-date, a gain of over 23%, research pointed to a $7–10 per barrel geopolitical risk premium already baked in, comparable to the peak seen during the 2023 Israel-Hamas war. (Source: Ainvest)
The market’s reaction to diplomacy is a stark reminder of this premium’s fragility. When Iranian officials signalled progress in U.S.-Iran nuclear talks earlier this week, Brent slipped roughly 1% to $70.89, a clear sign that the premium is sensitive to diplomatic signals. (Source: Ainvest)
The $100 Question: What Analysts Are Saying
The market’s reaction swiftly drew a chorus of analyst commentary. ICIS’s Ajay Parmar was direct: the strikes are supportive, but a Hormuz closure is the decisive factor. (Source: Reuters) Iran produces approximately 3.3 to 3.5 million barrels per day, roughly 3% of global supply, and is OPEC’s third-largest producer. (Source: Business Today) Rystad Energy estimates a prolonged closure would remove 8–10M bpd, even accounting for pipeline bypasses. RBC Capital’s Helima Croft noted Middle East leaders had already warned Washington that war with Iran could push prices above $100. Rabobank forecast above $90 near-term; Rystad’s Jorge León called a $20 jump to ~$92/bbl. (Source: Reuters)
TABLE 2: ANALYST PRICE VIEWS
(Source: Reuters, Market watch, Ainvest)
Why Asian Buyers Are Rushing for Murban
Even before this week’s escalation, Murban was outperforming peers. Spot premiums for March-loading Murban touched $2.53/bbl, the highest since November, driven by Asian refiners replacing U.S. supply as the arbitrage window closed. The Brent/Dubai spread surpassed $2/bbl, making WTI costlier for Asian importers; VLCC charter rates from the U.S. Gulf to China surged 61% in under two weeks to $13.5 million. Separately, India’s Middle East crude imports hit 2.86M bpd, the highest since April 2022, as refiners diversify away from Russian barrels under tighter sanctions. (Source: Zawya)
The Supply Paradox: More Oil, Higher Prices
The central contradiction: supply is rising even as prices spike. ADNOC has offered extra Murban barrels to equity partners; Iran tripled its tanker-loading rate; Saudi Arabia and the UAE are boosting exports. (Source: Oilprice)
Yet Goldman Sachs forecasts a 2.3M bpd global surplus in 2026, with supply growth of 2.4M bpd versus demand growth of just 850K bpd, pointing to a Q4 Brent base case of $60. The EIA projects an average of $58 for the full year. (Source: Ainvest)
Responding to the crisis, OPEC+ agreed on Sunday to raise output by 206,000 barrels per day from April, a modest increase, representing less than 0.2% of global demand. (Source: Reuters)
Market direction hinges on Geneva: nuclear talks could unwind the risk premium; any Hormuz disruption could push it sharply higher. (Source: Ainvest)
Stocks and ETFs That Could Benefit
Higher oil prices typically support GCC energy producers and regional equity markets.
In the UAE, companies within the ADNOC ecosystem, including ADNOC Gas, ADNOC Drilling, and ADNOC Distribution, could benefit from stronger Murban prices and improved upstream margins.
In Saudi Arabia, Saudi Aramco, the world’s largest oil exporter, tends to see higher revenues and cash flows during oil rallies, supporting dividends and the broader Saudi equity market.
Investors seeking diversified exposure can consider iShares MSCI UAE ETF (UAE), which tracks the MSCI All UAE Capped Index and has an expense ratio of about 0.59%. Other options include iShares MSCI Saudi Arabia ETF (KSA) and Franklin FTSE Saudi Arabia ETF (FLSA), which provide exposure to Saudi equities where energy companies such as Aramco play a major role in the market.
Bottom Line
Murban’s surge from ~$71 to ~$81 is a textbook geopolitical repricing event, swift, data-driven, and inherently fragile. The physical fundamentals supporting Asian demand for the grade are real and structural. But the $7–10 risk premium sitting atop an underlying supply surplus keeps prices tethered to diplomatic developments, making confident forecasting nearly impossible right now. Analysts from ICIS to RBC see a credible path to $100 if Hormuz stays disrupted; Goldman Sachs sees $60 by Q4 if the premium fades. As Citigroup’s strategist noted, geopolitical oil shocks have historically faded quickly, but this episode’s scale has surprised even seasoned market watchers.
What’s clear is this: the Strait of Hormuz has reasserted itself as the world’s most consequential 21-mile stretch of water, and for as long as 150 vessels sit at anchor in its approaches, the market will price that risk accordingly.
