Strait of Hormuz disruption and supply cuts drive lasting oil price shock and energy crisis
The ongoing conflict involving Iran is triggering a major global energy crisis, with experts warning that soaring oil prices and gas shortages are unlikely to ease anytime soon.
Benchmark Brent crude oil has already surged to nearly $120 per barrel, approaching its historic highs. While similar spikes were seen during the Russia-Ukraine War, analysts say this crisis is fundamentally different—and more dangerous.
A Crisis Unlike 2022
In 2022, sanctions on Russia disrupted supply chains but did not remove oil from the global market. Instead, shipments were rerouted and strategic reserves helped stabilize prices.
Today’s crisis, however, is driven by a physical supply disruption, not just political decisions.
At the center of the الأزمة is the Strait of Hormuz—a critical chokepoint through which a significant portion of the world’s oil and gas flows. Ongoing conflict has severely restricted tanker traffic, cutting off millions of barrels of supply.
According to the International Energy Agency, oil flows through the strait have dropped dramatically—from 20 million barrels per day to minimal levels, marking one of the largest supply disruptions in history.
Why Prices Won’t Fall Soon
Unlike past crises, rerouting and diversification are not enough this time. Key challenges include:
Limited alternative routes: Pipelines bypassing Hormuz can only handle a fraction of the lost supply.
Infrastructure damage: Strikes on oil and gas facilities have forced shutdowns, reducing production capacity.
Logistical constraints: Strategic oil reserves are difficult to transport quickly to affected regions.
Even the release of hundreds of millions of barrels from global reserves is unlikely to solve the problem, as it does not address the core issue—physical supply shortages.
Natural Gas Market Under Pressure
The crisis extends beyond oil. Around 20% of global LNG trade typically passes through the Strait of Hormuz, and much of it is now disrupted.
Alternative systems, such as regional pipelines, lack the capacity to compensate. Meanwhile, global LNG production is already operating at near maximum levels, leaving little room to increase supply quickly.
Long-Term Economic Impact
If the conflict continues, the world could face prolonged high energy prices and slower economic growth.
Key sectors likely to be hit hardest include:
Heavy industries like steel, cement, and petrochemicals
Transportation, with rising fuel and freight costs
Households, facing reduced disposable income
For Gulf nations, the الأزمة poses a serious threat to their role as reliable global energy suppliers, while the rest of the world risks entering a period of economic slowdown and demand reduction.
A Crisis That Demands Urgency
Experts warn that only a resolution to the conflict can stabilize energy markets. Until then, the combination of blocked trade routes, reduced production, and rising demand pressures will likely keep oil prices high and volatile.
Source: Al Jazeera