#middle-east-energy-crisis

#middle-east-energy-crisis

Roughly 20 million barrels per day of oil moved through Hormuz in 2024, equivalent to about one-fifth of global petroleum liquids consumption. When that waterway closed, oil prices spiked to $126 per barrel in what the U.S. Energy Information Administration has described as the largest supply disruption in global oil market history.

Even post-conflict, we expect [that] some of the trade flows [will] tend to reset rather than return to what they were before the war, said Rob Wilson of the energy data and consulting firm East Daley Analytics.

China's stockpiling surged in 2025 due to relatively low oil prices tied to softer demand, rising geopolitical risks, and a new domestic energy law requiring more reserves.

A 'workable system' of transit and shipowner confidence in the security of the transiting vessels is essential. This includes availability of insurance for transiting vessels, facilitating commercial trade financing, and sustained outbound vessel transits through the Strait of Hormuz.

The IEA sees global oil demand falling by 80,000 barrels per day this year, compared with a projected year-on-year rise of 640,000 bpd in its previous monthly report.

The war has effectively blocked the Strait of Hormuz, the world's most important oil route, since the end of February and cut exports from OPEC+ members Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Iraq.

The war in the Middle East is exposing how dependent the world is on a handful of strategic chokepoints. The Strait of Hormuz a narrow waterway in the Gulf is closed. The longer this goes on, the faster the global energy map could be reshaped.

Global stock markets have fallen and oil and gas prices have soared since Monday, the first day of trading after US and Israeli attacks on Iran on Saturday (February 28) and Iran's response by targeting major oil and gas infrastructure in the region. Brent crude rose about 7% on Tuesday to breach $80 (69) a barrel, having soared by as much as 13% at one stage on Monday.

Crude oil extended its rally for a third consecutive session today, supported by rising geopolitical tensions, severe winter weather disrupting US output, and a surprise draw in US crude inventories. Together, these factors kept the market focused on immediate supply risks and sustained the rebound. Markets reacted to renewed geopolitical risk sin the Middle East. President Trump has renewed pressure on Iran, while a US naval group's arrival in the region has fuelled disruption fears.