The International Energy Agency highlights the Middle East’s critical role in global energy markets, especially through the Strait of Hormuz, which handles about a quarter of seaborne oil trade and significant LNG exports. Disruptions there can sharply tighten markets and raise prices.
While global oil supplies were expected to exceed demand in 2026, prolonged interruptions or facility shutdowns could strain supplies of diesel, jet fuel, and LNG, impacting energy security worldwide. The IEA writes:
While upstream oil production facilities have largely been unaffected by attacks, the disruption to oil flows through the Strait of Hormuz has forced some operators to start shutting in production. The region’s output of refined products and liquefied natural gas (LNG) has also been significantly impacted.
Oil and natural gas prices spiked after the start of hostilities. Brent crude futures rose by 12% through 4 March, and Dutch TTF, the European benchmark for natural gas, was up by more than 50%. Moreover, some markets for oil products have been particularly affected, including those for diesel and jet fuel.
The global oil market has been in significant surplus since the start of 2025. Ahead of the military actions that began on 28 February, global oil supply was also expected to far exceed demand in 2026. However, prolonged supply disruptions could flip the market into a deficit. […]
About 80% of oil and oil products transiting the Strait in 2025 was destined for Asia. However, the impacts of a prolonged disruption to shipping would be global given the impact on prices and potential for physical shortages to develop. Any extended disruption in the Strait of Hormuz could also render unavailable the vast majority of the world’s spare oil production capacity, most of which is held by Saudi Arabia. […]
Countries that have long-term contracts with the UAE or Qatar would need to turn to the spot market for LNG. This, in turn, would drive up natural gas prices around the world.
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