Iran War Sends Gold and Oil Prices Higher. Is Gas Next?
Gold and oil prices are rising following the US and Israeli attacks on Iran over the weekend. Extending a trend that began in late 2025, investors continued to shun high-risk assets for safety as the war in the Middle East entered its third day.
Stocks were retreating on Monday. All three major indexes fell at the market open, and without clarity on the Iran conflict timeline, stocks could continue to perform well as uncertainty — a familiar theme since the start of President Donald Trump’s second term — grips global markets.
Here’s what you need to know about the war’s impact on gold, oil and gas prices so far.
Strikes in Iran send oil prices soaring, followed by gas
At press time, Brent crude – the global oil benchmark – was trading at $78.44 per barrel. That marks a one-year high and a nearly 41% increase in the price per barrel in Dec. 16, when oil was trading at a one-year low.
Prices for West Texas Intermediate – the US oil benchmark – also rose to $71.14 and are likely to challenge their one-year high of $73.82 per barrel. Prices on Monday morning were 29% above the one-year low of $55.14 on Dec. 16.
A major reason for the rise in oil prices is Iran’s threat to close the Strait of Hormuz, a nearly 90-mile-long, narrow strait that connects the Persian Gulf to the Gulf of Oman. According to the US Energy Information Agency, about 20 million barrels of oil – equivalent to about 20% of global oil consumption – are shipped every day.
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“The Iran crisis has entered a dangerous new phase, and markets have reacted accordingly,” wrote Lukman Otunuga, senior market analyst at FXTM, in an email Monday morning. “With oil rising, volatility, and investors rushing to traditional safe havens, we could see more volatility in the coming days and weeks.”
On the consumer side, a war between Iran and Israel and the US could affect pump prices.
Retail gas prices are dampening the price of oil, but Patrick De Haan, head of fuel analysis at GasBuddy, wrote in X that “the national average has now reached $2.96/gal,” adding that he believes prices could touch $3 per gallon soon “as price jumps begin to appear at many stations.”
A war with Iran is likely to continue to drive up gold prices
That turmoil has fed into other commodity markets and is strengthening the price of gold. When trading resumed on Monday, the precious metal jumped 1% to $5,333 per troy ounce, less than 5% from gold’s all-time high in January.
As a traditional safe-haven asset, one of the main drivers of gold prices is global volatility.
Angelo Kourkafas, global chief strategist for investment strategy at Edward Jones noted in an email that this “outbreak can cause short-term volatility, but recent episodes have produced limited and short-lived market impacts,” which remains the basic case expected of a financial services company.
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However, short-term volatility can have a significant impact on the price of the precious metal. One example came last June, when the US-Israeli attack on Iran’s nuclear weapons program pushed the price of gold to less than 1% from its then-high.
According to BullionVault, this latest price action follows the first full week of gold prices trading above $5,000 per troy ounce.
