Rising geopolitical instability in the Middle East is once again bringing the risk of a global oil crisis into focus. Ongoing military escalation, threats to key shipping routes, and pressure on critical energy infrastructure are already driving significant market volatility. In such a complex scenario, understanding these dynamics is essential to anticipate price movements and assess the broader impact on the global economy.
The Middle East has entered a phase of multi-front conflict of an intensity not seen since the Six-Day War of 1967, with Iran at the center of an escalation involving the United States, Israel, and the network of Shiite militias active in the region. U.S. and Israeli forces are conducting a prolonged campaign against Iranian territory, its command infrastructure, and its proxies, while Tehran continues to respond with missile launches, drone attacks, and maritime disruption operations, despite sustaining significant losses and operational degradation.
In Washington, President Donald Trump has clearly outlined the objectives of the war: to prevent Tehran from developing a nuclear arsenal, dismantle its missile capabilities, promote regime change, and disrupt financial and logistical flows to Iran-aligned militias. These objectives, fully shared by his cabinet, closely resemble the original—and far more stringent—version of the JCPOA negotiated under the Obama administration, which effectively aimed to dismantle the IRGC’s ability to finance itself and its proxies before integrating its remnants into the regular army.
With the failure of that vision and Iran’s inability to accept such conditions, the prospect of a negotiated agreement now appears virtually nonexistent. According to experts such as former CIA Director David Petraeus, the country’s extensive military and security structure—around one million personnel distributed among the IRGC, Basij, national police, and regular forces—makes it extremely difficult to overthrow the current regime, especially given the lack of a credible internal political alternative and the limited relevance of opposition figures in exile.
In this context, European security sources indicate that the IRGC’s strategy is to wear down the United States and Israel through sustained and distributed attacks, aiming to push Washington to halt military operations without achieving regime change. One of the most critical levers remains the threat to key global energy routes, particularly the Strait of Hormuz, through which up to one-third of global oil and one-fifth of LNG transit.
Iran has long possessed the capability to close the Strait if necessary, using anti-ship missiles, fast attack craft, mines, and drones—techniques already tested in recent exercises. Similar dynamics are also observed in the Bab el-Mandeb Strait, a crucial passage for energy flows between the Persian Gulf, the Red Sea, and the Mediterranean, where the presence of Houthi forces in Yemen exposes vessels to further attacks.
At the same time, Iran is intensifying operations against U.S. regional allies, as demonstrated by recent drone attacks targeting the Saudi refinery of Ras Tanura. Although most of the drones were intercepted, such incidents echo the devastating 2019 attacks on Abqaiq and Khurais, which temporarily disrupted 5% of global oil supply and triggered an immediate 20% surge in international prices.
The impact of the conflict on global energy markets is already evident and risks becoming increasingly destabilizing as Iran escalates pressure. For the U.S. economy, rising oil prices represent a direct threat, with significant political implications ahead of midterm elections.
According to World Bank estimates, a “small” supply disruption—between 500,000 and 2 million barrels per day—could increase prices by 3% to 13%. A “medium” disruption of 3 to 5 million barrels per day could push prices up by 21% to 35%, while a “large” disruption, comparable to the 6–8 million barrels per day lost during the 1973 crisis, could drive prices up by 56% to 75%.
With the real possibility that the Straits of Hormuz and Bab el-Mandeb could be closed or severely disrupted, and with Saudi and Qatari oil infrastructure increasingly under threat, the risk of a significant reduction in global supply appears higher than ever. In a conflict that, according to European sources, the IRGC is conducting using only a small fraction of its capabilities, escalation remains a tangible possibility, with potentially disruptive consequences for global security and energy market stability.
The war in the Gulf has directly and simultaneously affected all major refining hubs in the region, with total or partial shutdowns of key facilities such as Ras Tanura (550,000 b/d) in Saudi Arabia, Ruwais (922,000 b/d) in the UAE, Ras Laffan and Mesaieed in Qatar, and Sitra (405,000 b/d) in Bahrain.
The region’s overall operational capacity has been reduced by approximately 40%.
This loss impacts not only the crude market but, more critically, refined product markets, with direct consequences for the chemical sector and, notably, aviation, where jet fuel prices are rising—without even considering the additional effects on gas markets.
The global oil market is currently in a state of acute vulnerability, exacerbated by the growing risk of disruptions in the Strait of Hormuz, through which approximately one-fifth of global oil consumption passes daily. The structural dependence of the energy system on this corridor makes any escalation in the Middle East potentially destabilizing.
Saudi and Emirati pipeline bypass capacities, while significant, do not exceed 3.5–5.5 million barrels per day and cannot compensate for the roughly 15 million barrels that typically transit through Hormuz. At the same time, Gulf refining—now a crucial hub for diesel and jet fuel exports—represents an additional point of vulnerability: even a single plant outage would have an immediate and significant impact on distillate markets.
In this context of uncertainty, oil inventories play a critical role. OECD commercial stocks remain relatively high, at around 2.75–2.80 billion barrels, while global strategic reserves coordinated by the IEA exceed 1.5 billion barrels.
The most significant development is the proposal by the International Energy Agency to release between 300 and 400 million barrels of strategic reserves—potentially the largest intervention in its history. Such a measure would allow consuming countries to inject between 3 and 6 million barrels per day into the market for a period of 60 to 90 days, providing a crucial buffer in the event of a moderate disruption of Middle Eastern flows.
In a more severe scenario, such as a complete closure of Hormuz, the effectiveness of these reserves would still be limited over time: they could only offset a fraction of the deficit and only for a few weeks.
Price impact will depend on the scale of the disruption. A loss of 2–4 million barrels per day would likely push Brent into the $90–110 range, while a shock exceeding 9 million barrels per day would take the market into territory not seen since the 1970s, with potential spikes above $120–150 per barrel.
In any case, market reactions would be amplified by speculative dynamics and uncertainty regarding the duration of the conflict.
Key factors to monitor in energy markets
Overall, the current scenario requires constant monitoring not only of maritime traffic in the Gulf but also of political decisions regarding stock releases, the operational status of Middle Eastern infrastructure, and the evolution of insurance premiums and transportation costs.
Strategic reserves can provide temporary relief and mitigate the impact of a shock, but they cannot replace the long-term physical and geopolitical centrality of the Strait of Hormuz.
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