The US-Israeli war on Iran and Iranian retaliatory strikes have disrupted global energy markets, according to research from four sources. The Strait of Hormuz has been effectively closed, disrupting about 20% of global oil and gas supplies, three research sources reported. Muyu Xu, senior crude oil analyst at Kpler, said Brent crude oil prices surged to $106 per barrel by March 2026, up over 40% from $72 on February 27. However, some reports indicate prices surged past $120 per barrel in March 2026, while others claim Brent briefly rose above $85 a barrel in early March 2026. The exact price level remains unclear due to conflicting data.
LNG prices have also risen sharply. Xu noted that LNG prices rose by almost 60% since the start of the war. QatarEnergy suspended LNG production after an Iranian drone attack on March 2, 2026, according to three research sources. The extent of damage to QatarEnergy's LNG facilities and the timeline for resumption are not yet known.
The war has caused a systemic collapse of the Gulf Cooperation Council economic model, according to eight research sources. Oil production of Kuwait, Iraq, Saudi Arabia, and the UAE dropped by at least 10 million barrels per day by March 12, 2026, as reported by eight sources. This represents a significant reduction in global supply.
Iranian strikes on desalination plants threaten drinking water in Kuwait and Qatar, eight research sources reported. Global stock markets declined sharply in response to the conflict, according to two research sources. The UK gas price surged to its highest level for three years in early March 2026, eight sources said. The International Energy Agency assessed that the war is the largest supply disruption in the history of the global oil market.
Broader geopolitical risks have also emerged. Research from three sources indicates that geopolitical risks in 2025 include US-China rivalry, rising nationalism, and cybersecurity threats. The US-China rivalry is deepening global divisions and affecting supply chains, two sources reported. Cyberattacks are becoming more frequent and severe, with increasing digitization of critical infrastructure, according to eight sources.
Energy and climate change remain politically polarizing issues, with lack of progress on climate transition, eight research sources said. Institutional investors are reallocating capital to politically aligned jurisdictions due to geopolitical risks, according to eight sources.
The war in the Middle East has caused serious disruption to economies of directly affected countries, eight research sources reported. Large energy importers in Asia and Europe are bearing the brunt of higher fuel costs, according to eight sources. Low-income countries are especially at risk of food insecurity due to higher food and fertilizer prices, eight sources said.
The US is taking a more isolationist stance, withdrawing from global tax deal and criticizing NATO, according to eight research sources. The release of cost-efficient AI models by Chinese startup DeepSeek sparked concern about US dominance, eight sources reported. The specific policy responses from major economies to mitigate the crisis remain unclear.