Oil & Gas

From a business perspective, the growing threat to shipping through the Strait of Hormuz is raising operational and supply chain concerns for oil producers, refiners, traders, and shipping companies. If the waterway were to close, even temporarily, crude exports from Iraq and Kuwait could be halted within days, potentially removing up to 4.7 million barrels per day from global markets, according to J.P. Morgan. Tanker traffic disruptions, rising insurance costs, and rerouting challenges would increase logistics expenses and strain refiners reliant on Gulf crude. In response to the heightened risk environment, major financial institutions including ANZ and Goldman Sachs have revised their oil and LNG price forecasts upward, reflecting expectations of sustained volatility.

From an economic standpoint, prolonged elevated oil prices could reignite inflationary pressures and weigh on global growth. Higher crude and LNG prices would increase fuel costs for businesses and consumers, particularly in major importing economies across Asia and Europe. Forecast upgrades including ANZ’s $90 per barrel Brent outlook for early 2026 signal expectations that the conflict could extend beyond a short-term shock. A sustained price surge would impact trade balances, energy-intensive industries, and household spending, while potentially complicating central bank efforts to manage inflation.

Geopolitically, the situation underscores the strategic importance of the Strait of Hormuz and the broader Middle East energy corridor. Iranian state media has warned that vessels attempting to transit the strait could face attack, escalating tensions following Israeli and U.S. strikes on Iranian targets. Even without a full closure, the mere threat of disruption is enough to inject a significant risk premium into global markets. With limited spare capacity among OPEC+ producers and heavy global dependence on Gulf exports, the conflict reinforces how regional instability can quickly translate into global energy insecurity, keeping oil prices elevated amid uncertainty.