Global energy markets are facing a critical crisis following U.S. and Israeli military strikes on Iran, which resulted in the death of Supreme Leader Ali Khamenei. In response, Iran's Islamic Revolutionary Guard Corps has begun warning ships against transiting the Strait of Hormuz, effectively threatening to close the world's most vital oil chokepoint.
The Strait of Hormuz, located between Oman and Iran, is the only sea access for oil exports from Kuwait, Qatar, Bahrain, and much of Saudi Arabia. It carries approximately 20-26% of global crude oil supply (over 20 million barrels per day) and about 23% of global liquefied natural gas (LNG). Iran's main export terminal at Kharg Island, which handles 90% of its 3.3-3.5 million barrels per day output, has reportedly seen explosions.
Analysts warn of severe consequences if the strait is officially closed. JPMorgan Chase has described this as the "worst-case scenario," predicting oil prices could surge to the $120–130 per barrel range. Barclays analysts suggest Brent crude could reach $100 a barrel, while Goldman Sachs estimates that losing one million barrels per day of Iranian exports for a year would raise prices by about $8 per barrel. Rystad Energy projects a $10 to $15 per barrel increase in a wider conflict.
The economic ripple effects are substantial. Every $10 increase in oil prices can add approximately 20 basis points to U.S. inflation, according to Federal Reserve research. With oil prices already up about $15 from recent lows, this could translate to around 30 basis points of additional inflationary pressure. Capital Economics warns that a prolonged conflict could add 0.6–0.7 percentage points to global inflation.
The shipping industry is already feeling the impact. The daily cost of transporting 2 million barrels of crude oil from the Middle East to China has risen to approximately $200,000—a 584% increase since the first week of January and the highest level since the pandemic. Tanker stocks have surged, with Frontline up 74% in 2026 and DHT Holdings gaining 60%.
Cryptocurrency markets have reacted negatively to the geopolitical uncertainty. Bitcoin fell 2% following the news and has lost more than a quarter of its value over the past two months, with analysts noting it is no longer being treated as a safe-haven asset. Meanwhile, traditional safe havens like gold (up 22% in 2026), U.S. Treasuries, and the Swiss franc are seeing increased demand.
The U.S. administration has advised ships to stay at least 30 nautical miles away from American military assets in the region, and some oil majors have already suspended crude shipments through the strait. All eyes are now on Washington to see whether diplomatic efforts or continued military pressure will determine the fate of global energy markets.
