The Iran conflict is sending shockwaves through global energy markets, with oil prices surging past $90 a barrel and fuel shortages threatening to reshape economies and elections.
Global oil prices surged 24% this week to over $90 a barrel due to the Iran conflict, with analysts predicting weeks or months of elevated prices despite potential conflict resolution.
The Strait of Hormuz, critical for 20% of global oil and 17% of natural gas, has seen a near-complete shutdown, suspending 140 million barrels of oil shipments weekly.
Qatar declared force majeure on gas exports after Iranian drone attacks, with sources estimating at least a month for recovery. Qatar supplies 20% of global LNG.
Saudi Aramco’s Ras Tanura refinery and export terminal are closed due to attacks, with no details on damage. U.S. gasoline prices hit $3.32 per gallon, up 34 cents weekly, posing political risks for President Trump ahead of November midterms.
Asian importers, including India, China, and Thailand, have suspended fuel exports or declared force majeure due to supply shortages.
European energy markets face compounding risks from reduced LNG imports and higher prices, exacerbating post Russia-Ukraine crisis vulnerabilities. Analysts warn that even if the conflict ends, infrastructure damage and logistical disruptions could delay supply normalization for weeks or months.
Look, the real story here isn't the $90 price tag — it's the timeline problem. Markets can absorb a spike. What they can't absorb is not knowing when the other side of it arrives. With Ras Tanura dark, Qatar in force majeure, and the Strait effectively closed to commercial traffic, you don't just have a supply shock — you have a supply shock with no visible expiration date. That's a fundamentally different animal for traders, refiners, and anyone trying to hedge six months out.
Source: Reuters