The conflict has caused the largest supply disruption in the history of the global oil market, according to the International Energy Agency. About 25 to 30 percent of global oil and 20 percent of liquefied natural gas pass through the Strait of Hormuz, according to research from six sources. Iranian attacks on vessels passing through the Strait have dramatically reduced traffic in the channel, through which about 20 percent of global oil and gas supplies transit, according to the same research. On Thursday, Iran attacked fuel tankers in Iraqi waters, the research added. About 84 percent of crude oil and 83 percent of LNG that passed through the Strait of Hormuz in 2024 was bound for Asia, according to the US Energy Information Administration. China, India, Japan and South Korea accounted for nearly 70 percent of oil shipments through the Strait, the agency said.
Following the closure of the Strait of Hormuz on 4 March 2026, oil and LNG exports were stranded, causing Brent crude to surge past $120 per barrel and forcing QatarEnergy to declare force majeure on all exports, according to research from six sources. Oil production of Kuwait, Iraq, Saudi Arabia, and the UAE collectively dropped by 6.7 million barrels per day by 10 March, and by at least 10 million barrels per day as of 12 March, the research said. Brent crude oil was priced at $106 per barrel as of Monday morning, up more than 40 percent from $72 per barrel on February 27, according to the same research. Liquified natural gas (LNG) prices have risen by almost 60 percent since the start of the war, according to Muyu Xu, senior crude oil analyst at Kpler. On March 2, QatarEnergy suspended its LNG production after an Iranian drone attack, research from six sources reported.
If the conflict is short-lived, oil and LNG prices would fall back sharply with Brent crude reaching $65 per barrel by the end of the year, according to a Capital Economics report. In case of a longer war, oil prices would rise further to around $130 per barrel in Q2, the report said. The impact echoes the 1970s energy crisis through acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession, according to research from six sources. The war could shape the global economy in different ways, all leading to higher prices and slower growth, the research added.
The war has caused a systemic collapse of the Gulf Cooperation Council economic model, according to research from six sources. Arab states of the Persian Gulf and Iran rely on the Strait of Hormuz for energy exports and grocery imports; only Saudi Arabia and UAE have alternative routes, the research said. The maritime blockade triggered a concurrent 'grocery supply emergency' across Gulf Cooperation Council states, which rely on the Strait for over 80% of their caloric intake; by mid-March, 70% of food imports were disrupted, forcing retailers to airlift staples, resulting in a 40–120% spike in consumer prices, according to the research. Iranian strikes on desalination plants—the source of 99% of drinking water in Kuwait and Qatar—have shifted the crisis from fiscal contraction toward fears of a humanitarian crisis, the research said. The regional aviation sector, including Emirates and Qatar Airways, faced a near-total cessation of operations due to multi-national airspace closures, according to the research.
Large energy importers in Asia and Europe are bearing the brunt of higher fuel and input costs due to the conflict, according to research from six sources. Economies heavily dependent on oil imports in Africa and Asia are finding it increasingly hard to access supplies at inflated prices, the research said. Parts of the Middle East, Africa, Asia-Pacific, and Latin America face added strain from higher food and fertilizer prices and tighter financial conditions, the research added. Low-income countries are especially at risk of food insecurity and may need more external support, according to the research. Interest rate reductions were expected to be postponed or increased due to higher inflation caused by supply shortages and speculation, the research said. Stock markets experienced declines globally and there was a global bonds market sell-off, according to the research.
Analysts have noted a profound shift in the region's long-term economic narrative; Deutsche Welle reported that Gulf states are unlikely to sustain high levels of investment spending during or after the war. The conflict has been described as the 'end of the narrative' that the Gulf is a permanently safe destination for expatriates, immigrants, and tourists, according to the Middle East Council on Global Affairs. The war has precipitated a second major energy crisis in five years, according to research from six sources.
Since the US-Israeli strikes on Iran began on February 28, Tehran has launched ballistic missiles targeting Israel, US military bases, oil depots, and other infrastructure across the Gulf region, according to research from six sources. On Thursday, Iran attacked fuel tankers in Iraqi waters, the research said. On March 2, QatarEnergy suspended its LNG production after an Iranian drone attack, the research added.
The International Energy Agency described the 2026 Iran war and closure of the Strait of Hormuz as the largest supply disruption in the history of the global oil market. The war could shape the global economy in different ways, all leading to higher prices and slower growth, according to research from six sources. The impact echoes the 1970s energy crisis through acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession, the research said.
Low-income countries are especially at risk of food insecurity and may need more external support, according to research from six sources. Economies heavily dependent on oil imports in Africa and Asia are finding it increasingly hard to access supplies at inflated prices, the research said. Parts of the Middle East, Africa, Asia-Pacific, and Latin America face added strain from higher food and fertilizer prices and tighter financial conditions, the research added.
The current status of the Strait of Hormuz—whether it is fully closed or partially operational—remains unclear. The extent of damage to desalination plants in Kuwait and Qatar, and what humanitarian aid is being mobilized, has not been confirmed. Specific diplomatic efforts underway to de-escalate the conflict are not publicly known.
Global central banks' coordination in response to the economic crisis is uncertain, though interest rate reductions were expected to be postponed or increased due to higher inflation caused by supply shortages and speculation, according to research from six sources.