In the space of a single extraordinary week, the Iran conflict has reshaped the global energy landscape more thoroughly than any event since the Covid-19 pandemic. Oil has surged more than 25% — from $72.50 to $91.89 a barrel — in what represents the biggest weekly tsunami of oil price change since the market chaos of early 2020. Behind the numbers lies a story of simultaneous disruptions that have exposed the fragility of the system the world depends on for its energy.
The Strait of Hormuz, a narrow waterway through which a fifth of global oil and gas normally flows, has been effectively closed to commercial traffic by Iran’s threats and attacks on vessels. Nine ships have been struck since the conflict began. Around 600 vessels are stranded in the Gulf. Oil that cannot be shipped accumulates in storage, and storage is filling fast. Kuwait has already cut production; Saudi Arabia and UAE face the same crisis within 20 days.
Qatar’s LNG infrastructure is damaged and its export capacity is severely reduced, disrupting roughly 20% of global LNG supply. European gas prices have surged to three-year highs, and competition between European and Asian buyers for available cargoes is intensifying. Qatar’s energy minister has warned of a prolonged disruption — weeks or months — even if peace returns immediately.
The minister’s broader warning encapsulates the transformed landscape: if the conflict continues, all Gulf exporters could halt production and oil could reach $150 a barrel. This is not a speculative scenario but a reflection of the physical constraints building across the region’s energy infrastructure. The storage crisis has a 20-day clock. The tanker crisis has no clear end. And the infrastructure repairs needed in Qatar will take weeks or months regardless.
The financial world has taken stock of the reshaped landscape with widespread alarm. Stocks have fallen across Asia, Europe, and the UK, bond yields have surged, rate cut expectations have collapsed, and airlines have warned of devastating losses. The global energy landscape as it existed a week ago — characterized by manageable prices, stable supply, and cautious optimism — has been swept away by the oil tsunami of the Iran conflict.
