As oil prices climb, the Iran War poses a long-term threat to the energy markets.

 As oil prices climb, the Iran War poses a long-term threat to the energy markets.

A quarter of the world's supply of natural gas and crude oil has already been halted due to the fighting.

On March 3, 2026, tankers are spotted off the coast of Fujairah, United Arab Emirates.

With people sensitive to energy costs and hostile to foreign entanglements, the outlook presents a threat to the world economy as well as a political weakness for US President Donald Trump ahead of the 2018 elections. Since the beginning of the conflict, the price of oil has increased by more than 25% globally, raising the cost of fuel for customers everywhere. According to the American Automobile Association (AAA), the average national gas price increased by $0.43 over the previous week to $3.41 per gallon ($0.9 per litre) on Saturday. Goldman Sachs cautioned that if shipping difficulties persist, oil prices might rise above $100 per barrel. The US crude oil market saw its biggest weekly increase since 1983 on Friday, settling at little under $91 per barrel, suggesting that prices may rise further. JP Morgan analysts stated earlier this week that "the market is changing from pricing pure geopolitical risk to contending with genuine operational disruption, as refinery shutdowns and export limits begin to affect crude processing and regional supply patterns," according to the Reuters news agency. As Tehran assaults energy infrastructure around the area and targets ships in the crucial Strait of Hormuz between its beaches and Oman, the battle has already resulted in the suspension of roughly a fifth of the world's supply of natural gas and petroleum. The biggest oil producers in the region, Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait, have been forced to halt exports of up to 140 million barrels of oil, or roughly 1.4 days' worth of global demand, to international refiners due to an almost total closure of the strait. According to the World Bank, over 80% of international trade is conducted by sea, therefore interruptions in the waterway could result in higher freight prices and longer delivery times. Ilyas M. Dawaleh, the finance minister of Djibouti, issued a warning on Saturday that the conflict will "bring significant economic effects for poor countries." He said on X that small nations that rely on marine trade "risk being dragged into deeper economic uncertainty as external shocks ripple across the area and #Africa." Abdel Fattah el-Sisi, the president of Egypt, warned of rising inflation last week and declared that his nation's economy was in a "state of near-emergency." Storage facilities in the Gulf filling Analysts, traders, and sources told Reuters that these trends are causing oil and gas storage facilities in the Gulf to fill up quickly, prompting oilfields in Iraq and Kuwait to reduce oil production, with the UAE probably following suit. "Everyone will also close in if vessels do not come at some point soon," an anonymous source from a local state oil business told Reuters. According to Amir Zaman, head of Rystad Energy's Americas commercial team, it might take some time for oilfields in the Middle East that were forced to close due to shipping difficulties to resume normal operations. "The conflict might be resolved, but it might take days, weeks, or months, depending on the kinds of fields, their age, and the kind of shut-in they have had to do before you can get production back to what it was," he stated. Meanwhile, Iranian forces are attacking regional energy infrastructure, such as ports and refineries, forcing them to close. Some of these activities have been severely damaged by the attacks and require repairs. Following Iranian drone assaults, Qatar imposed force majeure on its massive gas exports on Wednesday. According to sources who spoke to Reuters, it might take at least a month to resume regular production levels. Twenty percent of the world's liquefied natural gas (LNG) comes from Qatar. Meanwhile, strikes have forced the closure of Saudi Aramco's massive Ras Tanura refinery and crude export terminal; the extent of the damage is unknown. Economists caution that the current state of affairs may result in both slower growth and higher prices.