The escalating conflict between the United States, Israel and Iran could seriously disrupt global oil supplies and send prices sharply higher.
Iran produces about 3.1 million barrels of oil per day, making it one of the world’s top 10 producers. It also holds the third-largest proven crude reserves globally, giving it major strategic importance despite years of US sanctions. Compared to Venezuela, whose oil industry has struggled under sanctions, Iran’s sector remains relatively stable and profitable.
Strait of Hormuz at the Center of Risk
The biggest concern is the possible closure of the Strait of Hormuz, a narrow but vital shipping route that carries about 20 million barrels of crude oil daily — nearly 20% of global oil consumption, according to the US Energy Information Administration.
Reports indicate that tanker traffic through the strait has slowed significantly, with some vessels turning back due to security fears. Iran’s Revolutionary Guards reportedly warned ships that the waterway is unsafe amid the attacks.
If the strait were effectively blocked, oil prices could surge past $100 per barrel — levels not seen since the start of the Russia-Ukraine war in 2022. Analysts warn that even uncertainty about safety in the area could push insurance costs sharply higher, limiting shipments.
Limited Alternatives and Rising Tensions
Only Saudi Arabia and the United Arab Emirates have limited infrastructure to bypass the strait, and even then, capacity would fall far short of replacing total flows.
Meanwhile, Iranian retaliatory strikes reportedly targeted US allies including Kuwait, the UAE and Iraq, raising fears of a wider regional war that could threaten oil fields, power plants and desalination facilities.
Impact on Global Economy
Higher oil prices would likely fuel global inflation and slow economic growth worldwide. For US President Donald Trump, rising fuel prices could also carry political risks, especially as he has promised cheaper energy for American consumers.
With tensions rising and shipping routes under threat, global energy markets now face one of their most serious tests in years.
Source: TRT WORLD
