A joint military strike by the United States and Israel on Iran has heightened fears of a severe disruption to global energy supplies, with analysts warning that escalation in the Gulf could push oil prices sharply higher and threaten the global economy.
Iran, a member of the Organization of the Petroleum Exporting Countries, is the group’s fourth-largest producer, pumping just over 3 million barrels per day in January. The country’s strategic position along the Strait of Hormuz places it at the center of global energy security concerns. The narrow waterway is the most critical chokepoint in the international oil trade.
Energy markets have historically discounted the risk of a major supply disruption in the Middle East. However, Bob McNally, founder of Rapidan Energy and a former White House energy adviser under former U.S. President George W. Bush, warned that traders may be underestimating the consequences of potential Iranian retaliation.
“This is the real deal,” McNally said, predicting crude futures could climb by $5 to $7 per barrel when trading resumes as markets begin pricing in geopolitical risk.
On Friday, Brent crude settled at $72.48 per barrel, up 2.45%, while U.S. West Texas Intermediate closed at $67.02, a gain of 2.78%.
Analysts say Iran could respond by targeting commercial shipping in the Strait of Hormuz, potentially driving oil prices above $100 per barrel. McNally noted that Tehran possesses substantial stockpiles of naval mines and short-range missiles capable of disrupting tanker traffic.
According to data from energy consultancy Kpler, more than 14 million barrels per day transited the Strait in 2025, representing roughly one-third of global seaborne crude exports. Around 75% of those volumes were destined for China, India, Japan, and South Korea. China alone sources about half of its crude imports through the Strait.
“A prolonged closure of the Strait of Hormuz is a guaranteed global recession,” McNally said.
More than 20 million barrels of crude have been loaded for export from Gulf producers, including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, and Qatar. Kpler analyst Matt Smith reported that some tankers have already altered their routes, avoiding passage through the Strait.
The Gulf states hold the bulk of the world’s spare oil production capacity. In the event of a closure, much of that capacity would be unable to reach global markets because it depends on the Strait for export routes. Around 20% of global liquefied natural gas shipments, largely from Qatar, also pass through the waterway and would be difficult to replace.
McNally warned that Asian importers could begin stockpiling supplies if transit is disrupted, triggering intense competition for available cargoes. “You would see the mother of all bidding wars,” he said.
He added that oil prices might have to rise high enough to suppress demand through economic slowdown before market balance could be restored, noting limited short-term flexibility in global oil consumption.
Some alternative export routes exist. Saudi Arabia operates an east-west pipeline to ports on the Red Sea, and the United Arab Emirates maintains a pipeline to the Gulf of Oman that bypasses the Strait. However, analysts say only a small portion of total flows could realistically be redirected.
Regional tensions escalated further after Iranian state media reported missile strikes on U.S. bases in Qatar, Kuwait, the UAE, and Bahrain. Tom Kloza of Kloza Advisors said such actions could prompt insurers to sharply increase premiums for tankers transiting the Strait, or even refuse coverage altogether, complicating maritime trade.
The administration of U.S. President Donald Trump could draw on the Strategic Petroleum Reserve if prices surge. The U.S. reserve currently holds approximately 415 million barrels, according to Department of Energy data.
Kevin Book of ClearView Energy Partners cautioned that emergency stockpiles may not be sufficient in a sustained crisis. “In supply crises, duration matters. Scale does, too,” he said in a note to clients, adding that a full Hormuz shutdown could overwhelm coordinated releases from the United States and International Energy Agency members.
With global oil flows concentrated in a narrow corridor and spare capacity largely dependent on its access, any prolonged disruption in the Strait of Hormuz would likely reverberate far beyond the Middle East, testing the resilience of energy markets and the broader global economy.
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