The ongoing war between Iran, the United States, and Israel has delivered a significant shock to the global energy market. Intensified conflict in the Middle East has reduced daily oil supply by nearly 20 million barrels, pushing international crude oil prices above $100 per barrel for the first time since 2022, according to The Guardian.
Following escalating violence in the region, concerns over an oil supply crisis have surged rapidly. Brent crude opened trading in the Asia-Pacific region with a 16.6 percent increase to $108.10 per barrel, while the U.S. benchmark West Texas Intermediate (WTI) rose 19.6 percent to $108.72 per barrel.
The conflict has also triggered sharp declines in global stock markets. On Monday, Tokyo’s Nikkei index fell 6.3 percent, South Korea’s KOSPI dropped 5.9 percent, and Australia’s ASX 200 slipped nearly 3.9 percent. Analysts attribute the market turmoil to the daily shortfall of 20 million barrels, noting that there is no immediate sign of supply normalization. At the start of the year, oil prices were around $60 per barrel, meaning prices have surged by almost two-thirds in just a few months.
Over the weekend, at least five fuel facilities in and around Tehran were reportedly attacked, leaving the Iranian capital in what local sources described as a “scene of devastation”. In response to potential retaliatory strikes, Kuwait National Petroleum announced precautionary production cuts.
The strategically vital Strait of Hormuz has effectively been closed for a week. Typically, about one-fifth of global sea-transported oil and gas passes through this route, amplifying the supply crisis.
U.S. President Donald Trump commented on social media, saying that the rise in oil prices is a minor cost for global security and peace and describes it as a short-term impact of the war. He added that if Iran’s nuclear threat is eliminated, oil prices will quickly decline.
On the other hand, Iran has warned that if U.S. and Israeli attacks continue, oil prices could rise further. A spokesperson for the Islamic Revolutionary Guard Corps reportedly stated:
“If you can accept oil prices above $200 per barrel, continue this war.”
Qatar’s Energy Minister also cautioned that a prolonged conflict could force Gulf oil-exporting countries to halt production within weeks, potentially driving prices above $150 per barrel.
Hundreds of oil tankers in the Strait of Hormuz are now immobile, and Iran’s Revolutionary Guard has threatened to attack any vessel using the passage.
Market experts warn that the ongoing 20 million barrel daily shortfall is placing severe pressure on global oil markets, with no immediate solution in sight, signaling further volatility in prices and stock markets worldwide.
