The conflict has triggered a global energy shock, disrupting oil and gas markets and causing price spikes, according to multiple reports. The International Energy Agency says the loss of 20 million barrels of oil a day due to the war is the largest supply disruption in the history of the global oil market. The war has also led to the unprecedented shutdown of the Strait of Hormuz, a vital trade route for oil and gas, multiple reports indicate.
Brent crude oil registered its steepest one-month gains and dramatic daily price fluctuations since the war began, according to multiple reports. Brent crude oil prices climbed to $105.32 per barrel, up from roughly $70 before the war began, multiple reports indicate. Oil prices soared about 6% to their highest since 2024 on Tuesday, rising for a third session as the war against Iran widened, disrupting energy shipments from the Middle East and stoking fears of a prolonged conflict, according to research. Brent rose $4.70, or 6.1%, to $82.44 a barrel, and U.S. crude rose $4.43, or 6.2%, to $75.66, with Brent on track for its highest close since July 2024 and WTI for its highest since January 2025, according to research.
About 20% of global oil consumption normally passes through the Strait of Hormuz, according to the International Energy Agency. Iran has responded with strikes against energy infrastructure in Gulf countries and tankers in the Strait of Hormuz, through which a fifth of the world's oil and liquefied natural gas typically passes, according to research. Tankers and container ships are avoiding the Strait of Hormuz after insurers cancelled coverage for vessels and global oil and gas shipping rates soared, according to research. Concerns increased after Iranian media reported that Iran will fire on any ship trying to pass through the Strait of Hormuz.
Iran's strike on Qatar's Ras Laffan natural gas terminal wiped out 17% of Qatar's LNG export capacity, with repairs taking up to five years, according to state-owned QatarEnergy. Since the start of attacks, oil and gas infrastructure in several countries has shut because of damage or as a precaution, including Qatar stopping LNG production, Israel stopping production at some gas fields, Saudi Arabia shutting its biggest refinery, and output in Iraq dropping, according to research. Iraq, the No. 2 crude producer in OPEC behind Saudi Arabia, has cut production by nearly 1.5 million barrels a day, and cuts could more than double within days as the country runs out of storage space for crude it cannot export due to the crisis, according to research.
The International Energy Agency and its members are releasing 400 million barrels of emergency oil reserves, the largest volume in its history, according to multiple reports. Saudi oil giant Aramco is attempting to reroute some crude exports to the Red Sea to bypass the Strait of Hormuz where the risk of attacks has slowed shipping to a near halt, sources said. The effectiveness of these emergency oil reserve releases in stabilizing global prices remains uncertain.
Europe is experiencing deep energy-linked frustration and divisions similar to the 2022 crisis after Russia's invasion of Ukraine, according to a European diplomat. The EU has reduced its reliance on Russian energy, with only 2% of oil imports now from Russia, and plans to end all Russian gas imports by next year, according to multiple reports. Before Russia's invasion of Ukraine, Russia supplied an estimated 55% of German natural gas imports, according to multiple reports. Europe is better prepared for this energy crisis than the last, with wind and solar overtaking fossil fuels in EU power generation last year, experts say.
Energy-intensive companies in Britain and Europe, such as Somers Forge and British Steel, are facing rising costs and operational challenges due to high energy prices, according to company statements. British wholesale gas prices climbed as high as 171p a therm after the Iran war began, up from 78p a therm at the end of February, according to multiple reports. The UK imports about 70% of its gas, making it vulnerable to price swings, according to multiple reports. The chemicals sector in Britain is in crisis, with production output falling by 60% since 2021 and at least 25 sites closing, according to the Chemicals Industry Association.
Asian countries, including India, South Korea, Indonesia, Thailand, the Philippines, and Vietnam, are turning to coal due to disruptions in oil and gas shipments, according to multiple reports. Citing the Strait of Hormuz, India and Indonesia said they were seeking alternative energy supplies, according to research. In China, supply disruptions were causing some refineries to shut or push ahead maintenance plans, according to research.
Petrochemicals account for 15%-16% of global oil demand and are among the fastest-growing uses of fossil fuels, according to Fredric Bauer, senior lecturer at Lund University. Urea prices are up 50% and ammonia prices up 20% since the war, due to disruptions in fertilizer exports through the Strait of Hormuz, according to multiple reports.
The Iran war has caused environmental damage, including air pollution, soil and water contamination, and health risks that could persist for decades, according to experts. Over 400 environmentally concerning incidents related to the war have been recorded so far, according to the Conflict and Environment Observatory. The full extent of environmental damage from the war, including long-term health impacts and cleanup timelines, is not yet known.
Heightened tensions exist between Iran and the United States, with indirect talks ongoing and President Donald Trump warning that military strikes remain an option if diplomacy fails, according to research. The United States has expanded its military presence in the region, according to research. The exact current status of indirect talks between Iran and the United States, and whether diplomacy is still ongoing or has broken down, remains unclear.
The New York Times cited Iranian officials as saying Tehran has prepared contingency plans in case of war with the United States or Israel, including scenarios where senior leaders like Supreme Leader Ali Khamenei could be killed. Iran's contingency planning is designed to ensure continuity of the Islamic Republic under extreme circumstances, with senior figures like security chief Larijani, parliament speaker Mohammad Bagher Ghalibaf, and former president Hassan Rouhani named as part of that structure, according to the report. Larijani's expanding role has reduced the visible influence of President Masoud Pezeshkian in day-to-day governance, the report also suggested. Following the 12-day war with Israel, Khamenei appointed Larijani as secretary of the Supreme National Security Council, despite the Guardian Council previously disqualifying him from running in the presidential election, according to research.
Le Figaro published an account alleging that during nationwide protests, Khamenei was the target of an internal effort led by Rouhani to sideline him from crisis management. According to the French newspaper, Rouhani gathered political figures including former foreign minister Mohammad Javad Zarif, clerics from Qom, and individuals linked to the Revolutionary Guards to discuss an alternative leadership arrangement. Le Figaro said the effort ultimately failed, partly because Larijani did not support the initiative. Rouhani's office rejected the Le Figaro account, describing it as a US-Israeli fabrication aimed at creating doubt and concern in Iranian public opinion.
Iranian media widely republished the New York Times and Le Figaro reports but mostly avoided detailed analysis, according to research. The news outlet Eghtesad24 suggested the New York Times report portrays Larijani as a crisis manager operating across multiple arenas, from nuclear diplomacy to regional strategy and wartime planning, the outlet wrote.
The Swedish Armed Forces Chief warns that a U.S. war in Iran could have consequences for Ukraine, according to Michael Claesson. Rising oil prices could lead to Russia's war chest being replenished, according to Michael Claesson, Swedish Armed Forces Chief.
Soaring energy prices have led to attacks on EU climate policies, such as the carbon price and methane standards, by lobbyists and some political groups, according to multiple reports.
U.S. gasoline futures climbed about 4% to $2.47 a gallon, their highest since July 2024, and crack spreads soared to their highest since an unspecified date, according to research.