Tensions in the Middle East are bringing one of the global economy’s most sensitive flashpoints back into the spotlight: the Strait of Hormuz. About a fifth of the world’s oil and liquefied natural gas passes through this narrow sea corridor between Iran and Oman, and any disruption to traffic has the potential to trigger shockwaves in energy markets and the global economy. Tehran’s threats to close the route, OPEC+ reactions and price volatility bring back into question the scenario of a new oil crisis in a geopolitical context already marked by fragmentation and strategic rivalries.

In a world where energy remains a political weapon and an instrument of economic pressure, developments in the Persian Gulf may redefine the balance of power and stability of markets in 2026.

 

The price per barrel could exceed $100

“In the event of a prolonged disruption of supplies through the Strait of Hormuz, crude oil could quickly rise to $100 per barrel (…) especially in the event of attacks on oil facilities in the region,” Eurasia Group, a political risk consulting firm, told AFP. We recall that the last time crude oil prices exceeded $100 was at the beginning of the war in Ukraine, which, together with rising gas prices, contributed to a prolonged inflationary cycle.

“The net impact remains an effective loss of 8 to 10 million barrels of crude oil,” says Jorge Leon, Head of Geopolitical Analysis, Senior Vice President at Rystad Energy. The fact that Iran, one of the world’s ten largest oil producers, with approximately 3.1 million barrels per day, is at the centre of tensions is a cause for concern. If oil infrastructure is affected by attacks, this could have long-lasting consequences.

On the morning of March 2, Brent crude oil was up 6.7% to $77.71, after having risen above $78 overnight.

At the same time, the price of Brent North Sea crude oil rose by 9.90% to $80.16 a barrel, after already rising by 13%. This represents a significant increase in the price of Brent, the international benchmark for oil prices. It was already trading above $72 on February 27, a far cry from $61 at the start of the year.

 

Effects of a conflict in the Strait of Hormuz

Tehran has announced that it has closed shipping in the Strait of Hormuz, through which 20% of the world’s oil passes. The International Maritime Organization has asked shipping companies to “avoid” the region. A direct consequence of this decision is that shipping through the Strait of Hormuz is de facto suspended, which is a major problem for world trade, as some 20 million barrels a day pass through the strait.

Oil tankers sailing near the Strait of Hormuz have been targeted by drones, while hundreds of ships anchor off this narrow waterway between Iran and the Arabian Peninsula.

 

Why the Strait of Hormuz is a strategic location

The Strait of Hormuz, which connects the Persian Gulf with the Indian Ocean, lies between Iran and Oman. It is particularly vulnerable due to its narrow width of approximately 50 kilometres and its shallow depth, which does not exceed 60 meters. It is by far the main maritime transport route connecting the oil-rich countries of the Middle East to the rest of the world.

The secretary-general of the International Maritime Organization (IMO), Arsenio Dominguez, has urged shipping companies to avoid the region. “Ships should avoid transiting the affected area until conditions improve,” he said in a statement, urging shipping companies to exercise extreme caution.

 

Saudi Arabia, Russia and six other OPEC+ members increase oil production

In a bid to try to mitigate rising prices, Saudi Arabia, Russia and six other OPEC+ members increased their oil production quotas by 206,000 barrels per day for April on March 1. This increase in production is higher than the 137,000 extra barrels per day that experts had predicted before the weekend. But analysts do not expect this to prevent a sharp rise in prices. “It’s a signal, not a solution. If oil can’t transit through the Strait of Hormuz, an additional 206,000 barrels a day doesn’t do much to ease the market,” Jorge Leon told AFP.

For Iran, rising oil prices are in any case a way of putting pressure on Washington, especially as Donald Trump has promised his electorate low energy prices.

 

Previous oil export disruptions

In energy economics, an oil crisis refers to a sudden disruption between global oil supply and demand, simultaneously producing a sharp rise in prices, physical constraints on supply, and systemic macroeconomic effects (inflation, recession, industrial restructuring).

Previous situations include the Arab embargo that followed the Yom Kippur War (1973–1974), the disruption of exports related to the Iranian Revolution and the Iran–Iraq War (1979–1981), and the shock of the Gulf War (1990–1991). More recently, the energy shock following the large-scale Russian invasion of Ukraine (2022) produced a price crisis without a real global physical shortage.

 

Scenarios that could destabilize the world economy

Prior to the US-Israeli attack, Iranian officials and some media outlets had indicated the threat of blocking this sea passage, a key transit point.

In theory, oil-importing countries have reserves, as OECD members are obliged, through the International Energy Agency, to maintain 90 days’ worth of oil stocks, but prices above $100 are not ruled out. If the blockade of the Strait of Hormuz continues, “no matter how much oil there is in strategic reserves,” the loss of export volumes through this crucial passage “is simply too great,” according to energy experts.

A recent study by the Center for Strategic and International Studies (CSIS) considers four scenarios that could affect global energy markets.

First scenario: a campaign targeting Iranian exports, particularly the terminal on Kharg Island, could remove approximately 1.6 million barrels per day from the market. The effect would mainly be a general increase in prices—estimated at around $10–12 per barrel—linked to the readjustment of trade flows and higher insurance premiums, with a reversible shock if operations cease. Second scenario: Iran disrupts maritime traffic in the Strait of Hormuz through attacks, ship seizures, or mining. Part of the approximately 18 million barrels per day that transit the Gulf could be temporarily affected, causing a rapid increase in oil prices, transportation costs, and insurance premiums until maritime security is restored. Third scenario: US or Israeli attacks on Iranian oil facilities could permanently damage the country’s export and production capacities. The potential loss of several million barrels per day, combined with the risk of escalation, would make a sustained price increase above $100 per barrel likely. Fourth scenario: Iranian attacks against the Gulf Arab states’ offshore fields, terminals or platforms would constitute the most severe shock, threaten a significant share of regional exports and triggering a potential price spike that would exceed the peaks seen in 2022.

A parallel disruption of Qatar’s LNG exports through the Strait of Hormuz would amplify the crisis, affecting global energy markets. The threat of a US-Israeli operation in Iran has already caused a sharp rise in oil prices. Brent crude oil reached $71.95/barrel on February 20, $11 more than on December 31, 2025 (+18%).

 

Oil, once again a strategic weapon in the Middle East

During last June’s Twelve-Day War between Iran and Israel, joined by the United States in Operation Midnight Hammer, Gulf oil exports avoided major disruptions. This was to be expected, as a disruption of export flows from the Gulf would have necessarily stopped Iran’s own oil exports.

As the Twelve-Day War unfolded, Iran perceived that it was not facing an existential crisis, as its oil exports continued unabated and Tehran made no attempt to target oil assets or shipping in the Arabian Gulf.

 

Persian Gulf countries dependent on the Strait of Hormuz for oil exports

Six oil-producing countries in the Persian Gulf in the Middle East depend on unhindered maritime access through the Strait of Hormuz to reach world markets. These are Saudi Arabia, Iraq, the United Arab Emirates, Iran, Kuwait and Qatar. On average, 17 million barrels of crude oil transited through the Strait of Hormuz in 2025. But the potential for bypassing the Strait of Hormuz is limited.

Export routes bypassing the strait can only handle a fraction of the daily exports from the Gulf. Saudi Aramco’s East-West Pipeline connects the kingdom’s oil production centres in the Eastern Province with the Yanbu Commercial Port on the Red Sea. The pipeline could divert some quantities from the Gulf to the Red Sea, but only in small volumes. The pipeline is believed to have a capacity of 5 mb/d. But it already supplies Yanbu with nearly 800 kb/d for export cargoes and probably six Saudi Aramco refineries in central and western Saudi Arabia with about 1.8 mb/d. This would leave only about 2.4 mb/d of available pipeline capacity, compared to Saudi Arabia’s typical 6 mb/d from its Gulf terminals—allowing it to redirect less than half of its Gulf exports.

The United Arab Emirates (UAE) can redirect about half of its Gulf exports of 2 mb/d through pipelines to the port of Fujairah in the Gulf of Oman, bypassing the Strait of Hormuz. Fujairah already accounts for about a third of the UAE’s total exports of 3.2 mb/d, which means that the remaining third (1 mb/d) would be blocked in the event of closure of the Strait of Hormuz.

Other oil-exporting countries in the Gulf—Iraq, Kuwait, Bahrain, Qatar (total volume of 5.7 mb/d)—have no capacity to bypass the Strait of Hormuz; similarly, there is no other market for Qatar’s 10 bcm per day of LNG exports.

 

Trump, Tehran and oil: the dangerous Gulf equation

Gas prices are expected to rise as Qatar is a key exporter of liquefied natural gas, exacerbating inflationary risks. The last time oil prices topped $100 was at the start of the war in Ukraine.

Rising fuel prices, energy costs, and shipping costs, along with lost revenue from air transport, mean that the conflict “could have a negative impact on economic growth,” Eric Dor, Director of Economic Studies at IESEG School of Management, told AFP. “If it lasts for three days, it’s no big deal, but if it drags on, then yes, there will be an additional recessionary effect,” he summarized.

 

Sanctions increasingly difficult to enforce

Countries such as Russia, China, and India—major energy producers and consumers with geopolitical concerns that differ from those of Europe and the United States—mean that energy sanctions are not an insurmountable barrier. Perhaps only targeted secondary sanctions are more effective than complicated schemes involving large groups of players in a complex and fluid market.

 

Consequences for Moscow and the Middle East

Currently, more than 130 million barrels of Russian oil are loaded in tankers.

Faced with US and European sanctions and the risks buyers face when importing Russian oil, Moscow has been forced to drastically reduce the price of Urals crude in order to maintain its exports. Russian oil exported from the country’s western ports is now selling at an average discount of more than $30 to Brent crude, the biggest gap since spring 2023. Following discounts offered by Moscow to encourage buyers, the number of barrels of Russian crude at sea has almost doubled since January 2025 to 135 million barrels.

According to the Centre for Research on Energy and Clean Air (CREA), revenues from Russian fossil fuels fell by 19% last year and by 27% compared to 2021, before the invasion of Ukraine began.

The Middle East, for its part, is going through a moment of transformation in which the old order is disappearing, and a new one is taking shape. The wars in Gaza and Iran and the evolution of terrorist groups have dramatically changed the region, leading to unprecedented conflicts and alliances amid changing economies and energy flows. CSIS (Centre for Strategic and International Studies) experts are grappling with these fast-moving developments and exploring questions related to issues such as geopolitics and geostrategy, governance, counterterrorism, economics and security.

 

Bad news for Donald Trump and international trade

“The Achilles’ heel is high oil prices,” explains Michelle Brouhard, Head of Policy and Geopolitical Risk at Kpler. According to her, Iran could try to keep oil prices high to put pressure on Trump, who has promised low base prices as the midterm elections approach at the end of the year. Gas prices are also likely to rise: a fifth of the world’s trade in liquefied natural gas also passes through the Strait of Hormuz.

This conflagration in the region is bad news for international trade as a whole: the world’s major shipping companies have announced that they are avoiding the Strait, insurers have drastically increased their rates for ships transiting the Middle East or have even cancelled their coverage altogether. For cargo ships, sailing in the Gulf becomes prohibitively expensive or impossible.