On the morning of February 28, 2026, the world woke up to a different energy reality. Within hours of the first US-Israeli strikes on Iran, oil traders began pricing in the unthinkable: the closure of the Strait of Hormuz — the narrow 33-kilometre chokepoint through which roughly one-fifth of the world’s daily oil supply flows. Fifteen days into the conflict, the unthinkable has become fact. Global oil prices have surged nearly 40 % since the war began, briefly crossing $100 per barrel twice this week, and the world’s most powerful governments are scrambling for answers they do not yet have.
The Chokepoint That Controls the World
The Strait of Hormuz is not simply a shipping lane. It is the jugular vein of the global energy system. Every day, before the war, around 138 ships passed through its narrow waters — tankers carrying crude oil from Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar to energy-hungry markets in Asia, Europe, and beyond. China, Japan, South Korea, and India depend on Hormuz for the majority of their oil imports. Pakistan alone has historically routed nearly half of its petroleum imports through this passage.
Since the US and Israel launched joint strikes on Iran on February 28, ship traffic has fallen to a trickle — no more than five vessels per day. Iran’s Islamic Revolutionary Guard Corps has declared that any vessel linked to the United States, Israel, or their allies is a “legitimate target.” The IRGC’s threat is not empty rhetoric. At least 16 commercial vessels have been attacked in the region since the conflict began. A Thai-flagged cargo ship was set ablaze on March 11. Two oil tankers in Iraqi waters were struck on March 13 alone. Dubai’s international airport briefly closed when drones fell near its perimeter. Kuwait, Saudi Arabia, and Bahrain all reported intercepting Iranian projectiles this week.
The message from Tehran is unambiguous. Iran’s newly appointed Supreme Leader, Mojtaba Khamenei — who succeeded his father Ali Khamenei after the elder was killed in an Israeli strike at the start of the war — delivered a stark warning to global markets in his first public statement: the Strait of Hormuz will remain closed as a “tool of pressure,” and any attempt to artificially lower oil prices will fail. “Expect oil at $200 per barrel,” an IRGC spokesperson warned. That figure is not dismissed as fantasy by energy analysts.
An Unprecedented Supply Disruption
The International Energy Agency, which coordinates the energy security of 32 wealthy nations, has called this the largest supply disruption in the history of the global oil market. That is a remarkable statement from an organisation that has witnessed the 1973 Arab oil embargo, the 1979 Iranian Revolution, Iraq’s invasion of Kuwait in 1990, and Russia’s war on Ukraine. None of those crises closed the Strait of Hormuz. This one has.
The daily supply gap is staggering. The Strait normally carries as much as 20 million barrels per day. Analysts estimate the war is cutting global supply by approximately 8 million barrels a day in March alone — accounting for the near-closure of Hormuz, reduced output from Gulf producers whose storage tanks are filling up with unsellable crude, and the broader collapse in tanker confidence across the region.
To put that in perspective: the entire Strategic Petroleum Reserve of the United States — the world’s largest emergency oil stockpile — holds roughly 365 million barrels. The daily supply shortfall from Hormuz alone would drain that entire reserve in under 45 days at full deficit.
The IEA’s Historic But Insufficient Response
The world’s response came swiftly, if inadequately. On March 12, the 32 member countries of the IEA agreed to release 400 million barrels of oil from their emergency stockpiles — the largest such release in the organisation’s 50-year history, dwarfing even its response to Russia’s 2022 invasion of Ukraine. The United States alone committed 172 million barrels from its Strategic Petroleum Reserve.
The markets were not impressed. Oil prices rose more than 10 percent the same day.
The arithmetic explains the indifference. The IEA’s 400 million barrels, released over a 120-day period, amounts to roughly 3.3 million barrels per day — just 15 percent of the estimated daily shortfall from the Hormuz closure. Even if fully deployed at maximum speed, the reserves “buy time, but do not solve the crisis,” as analysts at Bernstein noted. The US portion alone will take 13 days to reach markets after authorisation and 120 days to complete delivery. The crisis, if it persists, will outrun the response.
Japan, which imports approximately 70% of its oil through Hormuz, began releasing its own reserves on Monday. Asian stock markets in Tokyo, Seoul, and Hong Kong opened sharply lower on Friday. The ripple effects are already being felt far beyond the Gulf.
What $100 Oil Means for the Rest of the World
For ordinary people — whether in Karachi, Cairo, Lagos, or Jakarta — $100 oil is not an abstraction. It is the price of bread, the cost of a bus ticket, the electricity bill that cannot be paid.
Analysts at the IMF had already warned, before the war, that every 10% rise in global energy prices adds approximately 0.5% to global inflation. Oil prices are now nearly 40% above pre-war levels. The inflationary math is severe: food systems that depend on diesel-powered transport and fertilisers derived from natural gas will see price rises within weeks. Airlines are already suspending routes. European energy ministers are warning of a “major energy supply crisis” if the Strait remains closed. Russia and the United States have begun quietly discussing coordination to stabilise energy markets — an extraordinary diplomatic development given the state of relations between Washington and Moscow.
For developing economies like Pakistan, which imports the vast majority of its petroleum and was already straining under a 40% fuel price hike announced just weeks ago, the Hormuz crisis represents a compounding catastrophe. The IEA itself noted that Pakistan and Bangladesh are “more price sensitive” than larger Asian economies when it comes to Qatari LNG and Gulf crude disruptions. QatarEnergy had already issued Pakistan a force majeure notice before the war escalated. The situation has only deteriorated since.
The sulfur supply chain — 45% of which flows through Gulf producers — has also been disrupted, threatening fertiliser production, copper processing, and industrial chemicals globally. Gulf states are also responsible for significant shares of the world’s helium supply, a critical input in semiconductor manufacturing. The economic tentacles of this crisis extend far beyond what fills a car’s fuel tank.
Can the Strait Be Reopened?
This is the question on which everything depends, and the honest answer is that no one knows.
The United States Navy is the only force capable of escorting tankers through the Strait under fire, but Energy Secretary Christopher Wright told CNBC on March 13 that such escorts “can’t happen now” and would take “until at least the end of the month” to begin. Even with naval escorts, shipping companies face catastrophic insurance costs and crew liability. Analysts say oil traffic will not return to pre-war levels even if escorts begin — the risk premium alone will keep many captains docked.
The Trump administration has publicly said it expects oil prices to “come down significantly” once the war is complete. But the administration has also shifted its stated war objectives multiple times in 15 days — from denuclearisation, to regime change, to securing regional commerce — without a clear end state. Echoes of Iraq are uncomfortable and unavoidable. Senior defence analysts warn of a conflict that could last months, not days.
Iran, for its part, appears to have prepared for exactly this moment. The IRGC’s mining of the Strait — US forces sank 16 Iranian minelayers this week — suggests a deliberate strategy to make the waterway impassable rather than merely contested. As one intelligence analyst put it, Iran may not be able to keep Hormuz closed forever, but it can keep it dangerous long enough to inflict historic economic pain.
The Road Ahead
The global oil market is navigating a crisis without modern precedent. The Strait of Hormuz has never been effectively closed before. Emergency reserves exist precisely for moments like this, but they were not designed for an indefinite closure of the world’s single most important energy corridor.
Three scenarios present themselves. In the most optimistic, a ceasefire or diplomatic breakthrough reopens the Strait within weeks, prices retreat sharply, and the global economy absorbs the shock with a painful but manageable inflation spike. In the central scenario, the war continues for one to three months, oil remains above $90, global recession risks mount significantly, and several developing economies face acute balance-of-payments crises. In the worst case, a prolonged conflict, Iranian mining that persists despite US naval operations, and cascading production cuts across Gulf producers push prices toward $150 or beyond — a level last tested only in brief spikes — triggering a global recession.
What is certain is that the world has entered a period of energy insecurity that generations of strategic planners, pipeline negotiations, and reserve-building were designed to prevent. Whether those preparations prove adequate depends not on oil traders, but on the men with guns along a narrow passage between Oman and Iran.
The world is watching. And the tankers are not moving.
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