The Iran war is causing fuel prices to surge worldwide, even if the conflict ends quickly. Damaged facilities and shipping risks are limiting supply.
The conflict has disrupted nearly a fifth of global crude and natural gas supplies. Iranian attacks on ships in the Strait of Hormuz and regional energy infrastructure have forced closures of refineries and export terminals.
Global oil prices have risen more than 25% since the start of the Iran war. Consumers and businesses face higher fuel costs as the supply chain struggles to recover.
Middle East producers, including Saudi Arabia, Iraq, Kuwait, and the UAE, have suspended shipments of roughly 140 million barrels of oil. Storage facilities are filling fast, forcing oil fields to cut production. Experts say it could take weeks or months for production to return to normal.
“Even if the Iran war ends quickly, repair and restart of oilfields will take time,” said Amir Zaman of Rystad Energy. Infrastructure damaged by drone strikes and other attacks adds to the delay. Qatar has declared force majeure on gas exports, and Saudi Aramco’s Ras Tanura refinery has also closed.
The U.S. has offered naval escorts and insurance support for vessels in the Strait of Hormuz. However, the risk remains as Iran has the capacity to sustain drone attacks for months, analysts say.
Asian economies are particularly affected. India, China, Thailand, and Vietnam have all suspended fuel exports due to supply disruptions. Europe, still dependent on LNG after sanctions on Russian gas, faces higher energy costs. In the U.S., gasoline prices have risen to $3.32 a gallon, while diesel reached $4.33.
Analysts warn that the Iran war could influence global strategic reserves, as countries seek to top up stocks in case of further disruptions. Higher fuel prices could also create political and economic challenges for governments worldwide.
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The Iran war highlights the fragility of global energy supply chains and the lasting impact even a short-term conflict can have on international markets.
