Oil on track for record monthly surge as Iran war disrupts markets

Brent crude oil is poised for a record monthly gain of 51% in March 2026, surpassing the previous high of 46% set during the Gulf War in 1990. Oil surged amid the Iran war and near closure of the Strait of Hormuz, with Brent reaching $119.50/ barrel intramonth before settling at $112.57 on March 27. Despite a coordinated release of 400 million barrels from emergency reserves, analysts estimate a 9 million barrel per day supply disruption due to Middle East conflict. Gold, in contrast, experienced a sharp sell-off, dropping nearly 15% in March, its worst month since 2008. The decline was exacerbated by forced selling to cover losses elsewhere and significant central bank selling, notably the Turkish Central Bank offloading approximately 50 tonnes of bullion to stabilize the lira. This divergence from gold’s usual safe-haven role is a significant market theme amid geopolitical tensions and inflation concerns. Market implications include heightened volatility and risk aversion, with equities and government bonds also suffering notable losses—the Dow entering correction territory and the FTSE 100 losing over 8% in March. Rising UK and European bond yields highlight tightening financial conditions, increasing pressure on governments with limited fiscal room. Key risks remain ongoing supply disruptions and geopolitical escalation, while near-term catalysts will revolve around developments in the Gulf and central bank actions impacting bullion demand.