Energy

United States President Donald Trump has called for a naval coalition to deploy warships to secure the Strait of Hormuz, through which one-fifth of world oil shipments transit, as oil markets reel from supply disruptions caused by the US-Israeli war with Iran.

What is essentially the closure of the Strait of Hormuz by Iran in response to the attacks by the US and Israel has sent oil prices soaring to more than $100 per barrel.

Iran’s new supreme leader, Mojtaba Khamenei, has promised to keep the maritime artery closed while another top official in Tehran warned that oil prices could shoot up beyond $200 per barrel.

Trump said he hoped a naval coalition could secure the vital waterway, which connects the Gulf to the Gulf of Oman and the Arabian Sea. Iran has struck more than a dozen ships trying to sail through the narrow waterway since the hostilities started two weeks ago.

But will Trump’s solution work?

What has Trump said?

The US president has been facing domestic pressure over starting the war alongside Israel with no endgame or off-ramps in sight.

“On the strait of Hormuz, they had NO PLAN,” US Democratic Senator Chris Murphy wrote in a post on X. “I can’t go into more detail about how Iran gums up the Strait, but suffice it [to] say, right now, they don’t know how to get it safely back open.”

After threatening to bomb Iran more, Trump called on China, France, Japan, South Korea and the United Kingdom to send warships to secure the strait.

Trump claimed “100% of Iran’s military capability” had already been destroyed but added that Tehran could still “send a drone or two, drop a mine, or deliver a close-range missile somewhere along, or in, this waterway”.

“Hopefully China, France, Japan, South Korea, the UK, and others, that are affected by this artificial constraint will send ships to the area so that the Hormuz Strait will no longer be a threat by a nation that has been totally decapitated,” Trump wrote in a post on his Truth Social platform.

“In the meantime, the United States will be bombing the hell out of the shoreline, and continually shooting Iranian Boats and Ships out of the water. One way or the other, we will soon get the Hormuz Strait OPEN, SAFE, and FREE!”

Not long after, Trump returned to the keyboard, extending the invitation to all “the Countries of the World that receive Oil through the Hormuz Strait” to send warships, adding that the US would provide “a lot” of support to those who participated.

What has Iran said?

Alireza Tangsiri, commander of the Islamic Revolutionary Guard Corps Navy, said in a statement that claims by the US about destroying Iran’s navy or providing safe escort for oil tankers were false.

“The Strait of Hormuz has not been militarily blocked and is merely under control,” he said in a statement.

Iranian Foreign Minister Abbas Araghchi later doubled down on this, saying the strait remained open to international shipping except for vessels belonging to the US and its allies.

“The Strait of Hormuz is open. It is only closed to the tankers and ships belonging to our enemies, to those who are attacking us and their allies. Others are free to pass,” Araghchi said.

Khamenei – son of the late Supreme Leader Ali Khamenei, who was killed on the first day of the US-Israeli strikes – suggested in his first statement since taking power that the Strait of Hormuz would remain closed to provide leverage for Iran during the conflict.

What are the challenges in the Strait of Hormuz?

The strait, which is just 21 nautical miles (39km) wide at its narrowest point, is the only maritime passage into the Arabian Gulf (known as the Persian Gulf in Iran). Shipping lanes in the waterway are even narrower and more vulnerable to attacks.

It separates Iran on one side from Oman and the United Arab Emirates on the other.

In brief, there is no way in or out by sea when the Strait of Hormuz is closed.

Alexandru Hudisteanu, a maritime security expert who served 13 years in the Romanian navy, told Al Jazeera that in the type of coalition that Trump is hinting at, “interoperability is the biggest hurdle.”

“That’s the ability of cruises to work together or with different units and different doctrine when basic communication would be an issue,” he said.

Then, there is the geography of the Strait of Hormuz: “a very unforgiving environment to sail with this type of wartime threats”, Hudisteanu said. “Especially difficult under missile threats and these asymmetric potential mines or unmanned systems that could damage or destroy ships.”

Providing escorts to ships would be a costly option, and it would pose risks to participating foreign warships from possible Iranian attacks, which would likely further drag more countries into the ongoing war.

From Iran’s point of view, “the fact that the shoreline is so close and the actual maritime passage is highly congested and confined is an advantage by default,” Hudisteanu added. Geographically, Iran keeps it as a gauntlet, with no way out for the ships unless Tehran allows it.

Another major challenge for any naval coalition trying to secure the passage would be the timeline of any operation.
”The security of the strait could be achieved. It’s just a matter of how much time you need and how many assets you need,” the analyst said. Rushing through it “could have negative implications for the security of the mission and the region”.

How have countries responded?

No country has so far publicly agreed to Trump’s call to send warships to secure the Strait of Hormuz.

London said it is “intensively looking” at what it can do to help reopen the maritime passage. British Energy Secretary Ed Miliband said: “We are intensively looking with our allies at what can be done because it’s so important that we get the strait reopened.”

Chinese Ministry of Foreign Affairs officials said Beijing is calling for hostilities to stop and “all parties have the responsibility to ensure stable and unimpeded energy supply.”

Japan said the threshold is “extremely high” to send its warships on such a mission. “Legally speaking, we do not rule out the possibility, but given the current situation in which this conflict is ongoing, I believe this is something that must be considered with great caution,” said Takayuki Kobayashi, policy chief of Japan’s ruling Liberal Democratic Party.

France also confirmed that it will not send ships. The Ministry for Europe and Foreign Affairs said in a statement on Saturday: “Posture has not changed: defensive it is,” in reference to President Emanuel Macron’s assertion that France will not join the war against Iran.

South Korea, which imports 70 percent of its oil from the Gulf, said it was “closely monitoring” Trump’s statements and “comprehensively considering and exploring various measures … to ensure the safety of energy transport routes”.

Are countries negotiating with Iran?

Some countries have been negotiating with Iran to secure passage for their petroleum shipments.

Two Indian-flagged tankers carrying liquefied petroleum gas (LPG) have sailed through the Strait of Hormuz. New Delhi depends on this passage for 80 percent of its LPG imports.

The war on Iran has caused a critical shortage of cooking gas for India’s 333 million households. New Delhi has long had ties with Iran, but the government of Prime Minister Narendra Modi has not condemned the killing of Ali Khamenei. It has condemned Iran’s retaliatory attacks on Gulf countries, where millions of Indian citizens work and send $51bn in remittances home every year.

Iran’s ambassador to India, Mohammad ⁠Fathali, said Tehran had allowed some Indian vessels to pass through the Strait of Hormuz in a rare exception to the blockade but did not confirm the number of vessels.

A Turkish-owned vessel was similarly granted permission last week after Ankara negotiated passage directly with Tehran. Fourteen more Turkish vessels are awaiting clearance.

France and Italy also reportedly opened talks with Iranian officials to negotiate a deal to allow their vessels through the strait, but there has been no official confirmation yet.

“Iran is affecting maritime supply,” Hudisteanu said. “It’s affecting the maritime security of the region and the entire ecosystem and bringing the entire world to the table as the global price for oil and gas increases.”

Hundreds of tankers sit idle on both sides of the Strait of Hormuz as Iran has effectively closed the waterway, pushing oil prices above $100 – the highest since 2022, after the start of the Russia-Ukraine war.

Oil tanker traffic in the strait, through which one-fifth of global oil passes, has plunged after Israel and the United States launched attacks on Tehran on February 28. Asian countries, including India, China and Japan, as well as some European countries, source large portions of their energy needs from the Gulf. A disruption in supply will rattle the global economy.

With an aim to cushion from the shock, the International Energy Agency (IEA) has decided to release 400 million barrels of oil from emergency reserves, the largest coordinated drawdown in the agency’s history. But it has failed to push the prices down.

The agency had released about 182 million barrels after Russia’s invasion of Ukraine to stablise the oil prices.

According to the agency, oil shipments through the strategic waterway have fallen to less than 10 percent of pre-war levels, threatening one of the most critical arteries in the global energy system.

IEA members collectively hold about 1.25 billion barrels in government-controlled emergency reserves, alongside roughly 600 million barrels in industry stocks tied to government obligations.

A large number in a massive market

The figure may appear vast, but it shrinks quickly against the scale of global energy demand.

“This feels like a small bandage on a large wound,” energy strategist Naif Aldandeni said, describing the world’s largest coordinated emergency oil release as governments scramble to steady markets shaken by war.

The US Energy Information Administration (EIA) estimates world consumption of petroleum and other liquids will average 105.17 million barrels per day in 2026. At that rate, 400 million barrels would theoretically cover just four days of global consumption.

Even when compared with normal traffic through the Strait of Hormuz – around 20 million barrels per day – the released oil equals only about 20 days of typical flows.

Aldandeni told Al Jazeera that emergency reserves can calm panic in markets but cannot replace the lost function of a disrupted shipping corridor.

“The release may soften the shock and calm nerves temporarily,” he said, “but it will remain limited as long as the fundamental problem — the freedom of supply and tanker movement through Hormuz – remains unresolved.”

Oil prices reflect those anxieties. Brent crude ended trading on Friday at $103.14 per barrel, after surging to nearly $120 earlier as fears of disrupted production and shipping intensified.

Geopolitical risk premium

Oil expert Nabil al-Marsoumi said the price surge cannot be explained by supply fundamentals alone.

“The closure of the Strait of Hormuz added roughly $40 per barrel as a geopolitical risk premium above what market fundamentals would normally dictate,” he told Al Jazeera.

From that perspective, releasing strategic reserves serves primarily as a temporary tool to dampen that premium rather than fundamentally rebalance the market.

Prices above $100 per barrel are uncomfortable for major consuming economies already struggling to curb inflation and protect economic growth.

Recent EIA projections suggest global demand has not yet declined significantly because of the war, remaining close to 105 million barrels per day. The market pressure, therefore, stems less from falling consumption and more from fears of supply shortages and delays in deliveries to refineries and consumers.

Threats to oil infrastructure

The latest escalation could deepen those fears.

United States President Donald Trump said on Friday that the US Central Command (CENTCOM) had “executed one of the most powerful bombing raids in the History of the Middle East and totally obliterated every MILITARY target in Iran’s crown jewel, Kharg Island”.

He added that “for reasons of decency” he had “chosen NOT to wipe out the Oil Infrastructure on the Island”, but warned Washington could reconsider that restraint if Iran continues to disrupt shipping through the Strait of Hormuz.

CENTCOM confirmed the operation, stating US forces had struck “more than 90 Iranian military targets on Kharg Island, while preserving the oil infrastructure”.

Iranian officials have meanwhile warned they would target energy facilities linked to the US across the region if Iranian oil infrastructure comes under direct attack.

Kharg Island is not simply a military location. It serves as the primary export terminal for Iranian crude, making it a critical node in the country’s oil supply network.

If attacks move from obstructing shipping to targeting export infrastructure itself, the crisis could shift from a chokepoint disruption scenario to one involving direct losses of production and export capacity.

In such circumstances, the oil released from emergency reserves would act only as a temporary bridge rather than a lasting solution to lost supply.

Major oil companies such as QatarEnergy, the world’s largest producer of liquefied natural gas (LNG), Kuwait Petroleum Corporation and Bahrain state oil company Bapco have shut production and declared force majeure, while Saudi Aramco, the world’s largest oil producer, and UAE state oil company ADNOC have shut down their refineries.

Limits of emergency reserves

Even under a less severe scenario – where maritime disruption persists but infrastructure remains intact — the ability of strategic reserves to stabilise markets remains constrained by logistics.

The US Department of Energy said the US Strategic Petroleum Reserve held 415.4 million barrels as of 18 February 2026. Its maximum drawdown capacity is 4.4 million barrels per day, and oil requires about 13 days to reach US markets after a presidential release order.

That means even the world’s largest emergency stockpile cannot flood the market with crude immediately. The release must move through pipelines, shipping networks and refining capacity before reaching consumers.

Aldandeni said the current intervention would likely produce only a temporary stabilising effect, while al-Marsoumi warned that prolonged disruption in the Strait of Hormuz – or the spread of threats to other chokepoints such as the Bab al-Mandeb Strait in the Red Sea could quickly send prices further higher.

March 14 (UPI) — Russian attacks on Kyiv overnight left at least four people dead and 15 injured, Ukrainian President Volodymyr Zelensky announced Saturday.

The missile and drone attacks hit four districts in the capital, bringing damage to schools, residential buildings and critical infrastructure, regional officials said, as reported by EuroNews. Zelensky said the attacks caused damage in Kyiv, Sumy, Kharkiv, Dnipro and Mykolaiv.

“The main target for the Russians was the energy infrastructure of the Kyiv region, but unfortunately, there were also direct hits on and damage to ordinary residential buildings, schools and civilian businesses,” Zelensky said in a post on X.

Zelensky said Russia used 430 drones and about 68 missiles to carry out the attacks, 58 of which were intercepted by Ukraine’s air defense system.

The president said the number of weapons used in the attack is a reminder to Ukraine’s partners that air defenses and missiles are a “daily necessity.”

“Every agreement on missile supplies cannot wait — everything must be implemented as quickly as possible,” Zelensky said. “Our agreements to increase the production of air defense missiles are a critical direction, and this direction requires one hundred percent attention.”

NBC News reported that Ukraine is waiting for the Trump administration to approve a major drone production deal.

He said Russia will attempt to take advantage of the new war in Iran and will benefit a surge in oil prices and from the United States easing sanctions on Russian oil to balance supply drops through the Hormuz Strait.

Russian officials said, meanwhile, that Ukrainian drones hit an oil refinery in the southern Krasnodar region.

March 14 (UPI) — President Donald Trump announced that U.S. forces “totally obliterated” every military target on Iran’s Kharg Island, a key port that exports the vast majority of Iran’s oil.

In a post on Truth Social on Friday evening, Trump described the attack as “one of the most powerful bombing raids in the History of the Middle East.”

He said he directed U.S. Central Command to carry out the bombings after Iran halted ships’ passage through the Straight of Hormuz. About 20% of the world’s crude oil passes through the strait.

“For reasons of decency, I have chosen NOT to wipe out the Oil Infrastructure on the island,” Trump wrote.

“However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision.”

Kharg Island is about 15 miles south of the Iranian mainland through which about 90% of the country’s oil exports pass, The Washington Post reported. It’s a critical piece of Iran’s economy and a full attack on the oil infrastructure there could hinder Iran’s ability to pay its military.

Iranian officials said the site was “proceeding normally” after the U.S. attack.

In response to Friday’s bombings on Kharg Island, Iran threatened its own attack on key oil infrastructure in the United Arab Emirates, CNN reported.

Oil has been a key factor in the war in Iran, which began Feb. 28 with surprise U.S. and Israeli airstrikes on dozens of Iranian sites. AAA reported Saturday that the average price of a gallon of gasoline was $3.68 in the United States, up 23% since the start of the war.

This could, in turn, have a dramatic impact on other aspects of the U.S. economy, including food prices, jet fuel and fertilizer.

Miguel Diaz-Canel says discussions held to find solutions ‘through dialogue’ as Washington tightens oil blockade.

Cuban ⁠officials have ⁠held talks with the United States government to seek solutions to the crippling ⁠blockade imposed by Washington, President Miguel Diaz-Canel said, as the Trump administration’s threats to take over the Caribbean nation escalate.

“These talks have been aimed at finding solutions through dialogue to the bilateral differences ‌we have between the two nations,” Diaz-Canel said in a video aired on national television on Friday.

Diaz-Canel said “international factors have facilitated these exchanges”.

He said no petroleum shipments have arrived on the island in the past three months, which he blamed on the US energy blockade.

Critical oil shipments from Venezuela were halted after the US attacked the South American country and abducted President Nicolas Maduro.

Cuba’s western region was hit by a massive blackout last week, leaving millions without power.

The talks come days after President Donald Trump levelled his latest threat at Cuba, saying the White House’s plans for the Caribbean nation may include a “friendly takeover”.

‘Impact tremendous’

Diaz-Canel added that Cuba, which produces 40 percent of its petroleum, has been generating its own power but that it hasn’t been sufficient to meet demand.

He said the lack of power has affected communications, education and transportation, and that the government has had to postpone surgeries for tens of thousands of people as a result.

“The impact is tremendous,” he said.

The president added that the aim was “to determine the willingness of both parties to take concrete actions for the benefit of the people of both countries”.

“And in addition, to identify areas of cooperation to confront threats and guarantee the security and peace of both nations, as well as in the region,” he said.

For decades, severe US economic sanctions on Cuba have crippled its economy and cut it off from global trade. In response, Cuba has depended on oil supplies from foreign allies, including Mexico, Russia and Venezuela.

Energy markets remain on tenterhooks as the prospect of prolonged war in the Middle East grows.

Oil prices have again risen above $100 per barrel as energy markets see little relief amid the biggest disruption to global energy supplies in a generation.

Brent crude, the international benchmark, surged more than 9 percent on Thursday as traders weighed the prospect of weeks, or even months, of turmoil in energy markets as the United States and Israel wage war on Iran.

Brent futures, which are traded outside of regular market hours, were priced at $101.13 as of 03:00 GMT.

Asian stock markets, including exchanges in Tokyo, Seoul and Hong Kong, opened sharply lower on Friday, following steep losses on Wall Street overnight.

The latest surge in oil prices came after Iran’s Supreme Leader Mojtaba Khamenei pledged to maintain the effective closure of the Strait of Hormuz, which normally transports about one-fifth of global oil supplies.

In a statement read out on his behalf on Iranian state television, Khamenei described Tehran’s threats against shipping in the waterway as a “lever” that “must continue to be used”.

US President Donald Trump struck a similarly defiant tone on Thursday, posting on Truth Social that stopping Iran from getting nuclear weapons was of “far greater interest and importance” than rising oil prices.

‘Lack of tangible goals in this war’

Traffic through the strait has effectively ground to a halt due to Iranian threats, with only a handful of vessels passing through each day, many of them claiming links to China, Iran’s key economic partner.

According to the United Kingdom Maritime Trade Operations (UKMTO) centre, no more than five ships have passed through the waterway each day since the US and Israel launched joint strikes on Iran on February 28, compared with an average of 138 daily transits before the war. At least 16 commercial vessels have been attacked in the region since the start of the conflict, according to the UKMTO.

Tehran has claimed responsibility for several of the attacks, including a strike on Wednesday that crippled a Thai-flagged vessel off the coast of Oman.

Efforts to bring calm to the market have so far done little to tame prices, which are up nearly 40 percent compared with before the start of the war.

The International Energy Agency’s (IEA) announcement on Wednesday that member countries would release 400 million barrels of oil from emergency stockpiles drew a tepid response among traders eyeing a daily shortfall in global supplies estimated at 15-20 million barrels.

The US Department of the Treasury’s issuance on Thursday of a temporary licence authorising countries to purchase sanctioned Russian oil that has been stranded at sea also failed to move the market, with Brent crude staying above $100 a barrel after the Treasury announcement.

“The key problem is a lack of tangible goals in this war,” said Adi Imsirovic, an energy security expert at the University of Oxford.

“It makes it hard for oil traders to see the light at the end of the tunnel,” he said.

Trump has repeatedly floated the possibility of using the US Navy to escort commercial shipping through the strait, but the Pentagon has yet to conduct such operations amid concerns about the risks posed by Iranian attacks in the narrow waterway.

In an interview with CNBC on Thursday, US Energy Secretary Chris Wright said that Washington was “not ready” to provide navy escorts but that such operations could begin by the end of the month.

“It’ll happen relatively soon but it can’t happen now,” Wright said.

The United States military is “not ready” to accompany oil ships through the Strait of Hormuz, a top official in President Donald Trump’s administration says as Iran continues to block the strategic waterway.

US Energy Secretary Chris Wright told the CNBC business news channel on Thursday that the markets are experiencing a “short-term disruption”, predicting that the war would go on for “weeks, not months”.

Despite Trump’s repeated threats, Iran has largely succeeded in shutting down the strait, which links the Gulf to the Indian Ocean. The closure has sent oil prices soaring.

Wright described the effects of the crisis as “short-term pain for long-term gain”, arguing that the US is “destroying” Iran’s ability to threaten the energy market.

Last week, Trump suggested that the US Navy would escort ships through the Gulf, but Wright said on Thursday that the move “can’t happen now”.

“We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities,” the energy secretary said.

“We don’t want this to be a brush-off for a year or two. We want to permanently destroy their ability to build missiles, to build roads, to have a nuclear programme.”

His comments came as Iran’s new supreme leader, Mojtaba Khamenei, affirmed in his first public comment since being selected to succeed his assassinated father, Ali Khamenei, that the Strait of Hormuz should remain closed during the war.

“The will of the people is to continue effective and deterrent defence,” Khamenei said in a written statement. “The tactic of closing the Strait of Hormuz must also continue to be used.”

The Iranian military has said it would “welcome” the US Navy escorting oil ships, suggesting it is prepared to strike US forces in the narrow waterway.

On Wednesday, three commercial vessels were attacked near the strait.

Wright announced earlier this week on social media that the US Navy had escorted an oil ship through the strait, then quickly deleted the post. The White House subsequently confirmed that the claim was not true.

It is not clear why the statement was released and then retracted.

Assurances by US officials that Washington would open the strait have temporarily calmed markets, only for prices to spike again.

The price of a barrel of oil peaked at about $120 on Sunday, up from about $70 before the US and Israel launched the war on February 28. It has been yo-yoing between $80 and $100 for the past few days.

In addition to the marine blockade, Iran has targeted oil installations across the Gulf.

As one of the world’s largest oil producers, the US is largely self-sufficient. But possible shortages in Asia and Europe have put a strain on prices globally.

According to data from the American Automobile Association, the average price of one gallon (3.78 litres) of petrol in the US is now $3.60, up from $2.94 last month.

Rising energy prices could fuel inflation and affect the cost of basic goods, including food.

But Trump suggested on Thursday that the US is benefitting from skyrocketing oil prices.

“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” the US president wrote in a social media post.

“BUT, of far greater interest and importance to me, as President, is stopping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World.”

Iran denies seeking a nuclear weapon, and Trump reiterated for months before the current conflict that US strikes against Iranian facilities in June had “obliterated” the country’s nuclear programme.

Iranian President Masoud Pezeshkian has laid out terms for ending the war with the United States and Israel in what analysts say is a possible sign of de-escalation from Tehran as the US-Israel war on Iran entered its 13th day on Thursday.

In a post on Wednesday on social site X, Pezeshkian said he had spoken to his counterparts in Russia and Pakistan, and that he had confirmed “Iran’s commitment to peace”.

“The only way to end this war – ignited by the Zionist regime & US – is recognizing Iran’s legitimate rights, payment of reparations, and firm int’l guarantees against future aggression,” Pezeshkian wrote.

This is a rare posture from Tehran, which has maintained a defiant stance and initially rejected any possibility of negotiations or a ceasefire when war broke out nearly two weeks ago.

Pezeshkian’s statement comes as pressure mounts on the US to halt what has become a very costly mission. Analysts say speculation from Washington that Iran would quickly submit after the killing of Supreme Leader Ayatollah Ali Khamenei were misguided.

Tehran is likely going to determine the end of this war, not the US or Israel, because of its ability to inflict economic pain broadly, they say.

Amid a military pummelling by the US and Israel, Iran has launched heavy retaliatory strikes at US assets and other critical infrastructure in Gulf countries, upsetting global supplies. It has also adopted what analysts call “asymmetric” tactics – such as disrupting the critical Strait of Hormuz and threatening US banking-linked entities – to inflict as much economic pain on the region and wider world as it can.

This is what we know about Pezeshkian’s stance and what the pressures are on both sides to draw the conflict to a close, quickly.

What has the war cost so far?

Economically, both sides have weaponised energy. Israel first targeted Iran’s oil facilities in Tehran on March 8, prompting an outcry from global health experts over the potential risk of air and water pollution.

Iran has, meanwhile, tightened its chokehold on the Strait of Hormuz shipping route – the only route to open sea for oil producers in the Gulf – with its military promising on Wednesday that it has the capabilities to wage a long war that could “destroy” the world economy.

Attacks on ships in the strait, through which about 20 percent of global oil and gas traffic normally passes, have effectively closed the route.

Oil prices rocketed above $100 per barrel late last week, up from around $65 before the war, with ordinary buyers feeling the increases at pumps in the US, Europe and parts of Africa.

On Wednesday, Iran upped the ante, saying it would not allow “a litre of oil” to pass through the strait and warned the world to expect a $200-per-barrel price tag.

“We don’t know how quickly it’ll revert back,” Freya Beamish, chief economist at GlobalData TS Lombard, told Al Jazeera. “We do think it’ll revert back to $80 in due course, but the ball is to some degree in Iran’s court,” she said, adding that because Iran needs oil revenue, the price hikes are expected to be time-limited.

The International Energy Agency agreed on Wednesday to release 400 million barrels from the emergency reserves of several member states but it is not yet clear what impact that will have, nor how quickly this quantity of oil can be released.

Tehran has also been accused of directly attacking oil facilities in neighbouring countries this week. Iraq shut all its oil port operations on Thursday after explosive-laden Iranian “drone” boats appeared to have attacked two fuel tankers in Iraqi waters, setting them ablaze and killing one crew member.

A drone was filmed striking Oman’s Salalah oil port on Wednesday, although Tehran has denied involvement.

What are Iranian officials saying about ending the war?

There has been conflicting messaging from the Iranian leadership.

Iran’s elite army unit and parallel armed force, the Islamic Revolutionary Guard Corps (IRGC), continues to show defiance, issuing threats and launching attacks on Israel and US military assets and infrastructure in neighbouring Gulf countries.

However, the political leadership has appeared more inclined towards diplomacy, analysts say. On Wednesday, President Pezeshkian said that ending the war would take the US and Israel recognising Iran’s rights, paying Iran reparations – although it’s unclear how much is being asked for – and providing strong guarantees that a future war will not be waged.

In a video recording last week, he also apologised to neighbouring countries for the strikes and promised that Iran would stop hitting its neighbours as long as they do not allow the US to launch attacks from their territory.

“I personally apologise to the neighbouring countries that were affected by Iran’s actions,” the president said, adding that Tehran was not looking for confrontations with its neighbours.

However, it is not known how much sway the political leadership has over the IRGC. Hours after the president’s apology last week, air defence sirens went off in Saudi Arabia, Qatar, the UAE and Bahrain, as strikes continued on the Gulf.

So, what is Iran’s actual position?

“Iran wants to go to the end to make sure that the United States and Israel never attack Iran again … so this has to be the final battle,” Al Jazeera’s Resul Serdar Atas explained.

Indeed, the IRGC sees this as an existential war, but the timing of Pezeshkian’s statement about ending the conflict also shows Tehran is pressured economically, politically and militarily, Zeidon Alkinani of Qatar’s Georgetown University told Al Jazeera.

“These differences and divisions [between IRGC and political leaders] always existed even prior to this war but we may notice it now more, given the fact that the IRGC believes that it has the right to take the front seat in leading this regional war, which is why a lot of the statements and positions are contradicting with the official ones from Pezeshkian,” he said.

The IRGC reports directly to Iran’s Supreme National Security Council (SNSC) and not to the country’s political leadership. That council is led by Ali Larijani, a top politician and close aide to the late supreme leader, Ali Khamenei, who analysts describe as a “hardliner”.

In a post on X on Tuesday, Larijani responded to threats from Trump about attacks on the Strait of Hormuz, saying: “Iranian people do not fear your hollow threats; for those greater than you have failed to erase it … So beware lest you be the ones to vanish.”

The newly elected supreme leader, Mojtaba Khamenei, was once in the IRGC and was put forward by the unit as the next ayatollah after his father was killed on the first day of the war, analysts say. He is thus not expected to follow the reformist, diplomatic ideals of President Pezeshkian and other political leaders which his father managed to marry with the IRGC militarised stance, they say.

What do the US and Israel say about ending the war?

There have also been conflicting messages from the Trump administration and Israel regarding when the war mission on Iran, codenamed Operation Epic Fury, is likely to end.

Trump told US publication Axios on Wednesday that the war on Iran would end “soon” because there’s “practically nothing left to target”.

“Anytime I want it to end, it will end,” he added. He had said earlier on Monday that “we’re way ahead of our schedule” and that the US had achieved its goals, even as speculation mounts about a possible US ground mission.

On the other hand, Israel’s Defence Minister Israel Katz said on Wednesday that the war would go on “without any time limit, for as long as necessary, until we achieve all the objectives and decisively win the campaign”.

Analysts say Trump’s stance that the conflict will be quick reflects increasing pressure on his administration ahead of upcoming mid-term elections in November.

Trump’s advisers privately told him this week to find a quick end to the war and avoid political backlash, according to reporting by The Wall Street Journal. That came as polls from Quinnipiac University and The Washington Post suggested that most Americans are opposed to the war in Iran.

In his 2024 presidential campaign, Trump promised to lower prices, and inflation had stabilised at 2.4 percent ahead of the war, according to government data released on Wednesday. Analysts speculate the conflict will likely push it back up.

The US spent more than $11.3bn in the first six days of the war, Pentagon officials told lawmakers in a classified briefing on Tuesday, Reuters reported this week – nearly $2bn a day.

The Washington-based think tank, Center for Strategic and International Studies (CSIS), estimated that the war cost Washington $3.7bn in its first 100 hours alone, or nearly $900m a day, largely due to its expenditure on costly munitions.

“It’s quite ironic that [Trump] chose a war that would make affordability worse, not better,” Rebecca Christie, a senior fellow at the Bruegel think tank, told Al Jazeera’s Counting the Cost.

“Every time the US loses even one object, air defence or a plane or something like that, that represents an awful lot of money that could have been used on some of these issues that have an impact on people’s day-to-day lives in the United States.”

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.

From Europe to Asia, countries are facing mounting supply risks and the threat of an inflation shock.

If the conflict between the US, Israel and Iran drags on, alternatives will be hard to find.

But, Russia is shaping up to be a major beneficiary, with soaring prices filling Moscow’s coffers despite Western sanctions.

The surge in oil prices triggered by the war in Iran is increasingly becoming a major concern for global central banks, which are closely monitoring the potential economic and financial consequences of the shock.

More than a week of conflict in the Middle East has disrupted energy supply routes and pushed crude prices sharply higher, raising fresh fears about inflation. For policymakers already grappling with fragile economic conditions, the oil spike presents a complex policy dilemma.

Historically, oil shocks have posed a difficult challenge for central banks. Rising energy prices can drive inflation higher while simultaneously weakening consumer spending and business activity by raising costs. In such circumstances, policymakers face an uncomfortable choice: tighten policy to control inflation or ease financial conditions to support economic growth and employment.

The current situation could potentially produce both outcomes at once, creating a scenario where inflation rises even as economic demand weakens a combination that complicates monetary policy decisions.

Inflation Versus Economic Growth

Central banks traditionally respond to inflationary pressures by raising interest rates or maintaining tighter monetary policy. Some policymakers argue that responding quickly to inflation triggered by an oil shock can prevent inflation expectations from becoming entrenched and reduce longer-term economic damage.

Others, however, advocate “looking through” temporary energy-driven price spikes, arguing that aggressive tightening could unnecessarily damage economic growth. This approach gained prominence after the pandemic, when many central banks initially viewed inflation as temporary a judgment widely criticised in hindsight.

The decision facing policymakers now depends on several uncertainties, including how long the conflict lasts, how severely energy supplies are disrupted, and whether governments intervene with subsidies or price caps to protect consumers.

Given these unknowns, many central banks may prefer to adopt a cautious approach, waiting to see how markets and economic conditions evolve before making significant policy adjustments.

Financial Stability Risks Enter the Picture

Beyond inflation and growth concerns, central banks must also consider a third responsibility that has gained prominence since the global financial crisis: financial stability.

Senior policymakers worry that the oil shock could expose vulnerabilities that have been building in global financial markets for years. A large macroeconomic disturbance involving energy prices, inflation, interest rates and currency volatility could trigger a broader financial stress event.

Much of the concern centres on the growing role of “shadow banking” institutions, financial intermediaries operating outside traditional banking regulation. These entities have become increasingly important providers of credit to companies and governments.

One major area of focus is the rapid expansion of private credit funds, which now manage more than $3 trillion globally. These funds allow asset managers to lend directly to businesses, often outside the scrutiny of public markets or traditional banking standards.

Regulators worry that during a major shock, investors could rapidly withdraw funds from these vehicles, potentially creating liquidity problems for borrowers and spillover risks for banks that help finance or manage the funds.

Pressure in Bond and Repo Markets

Another major source of concern lies in government bond markets, where highly leveraged hedge funds have become increasingly active. Many of these funds use repurchase agreements, or “repo” markets, to borrow money and finance large trades involving government bonds.

These strategies often rely on exploiting small price differences between cash bonds and futures contracts, but they involve substantial leverage. While such activity can help smooth government financing, it can also create systemic vulnerabilities during periods of market stress.

The Financial Stability Board, which monitors risks to the global financial system for the G20, warned earlier this year that sudden deleveraging in repo markets could disrupt sovereign bond markets.

More than $16 trillion in repo transactions backed by government bonds were outstanding last year, with about 60% concentrated in the United States. A sudden withdrawal of leveraged investors could therefore have significant ripple effects across global financial markets.

New Fragilities: Stablecoins and Technology Stocks

Regulators are also monitoring emerging risks linked to digital finance. Stablecoins cryptocurrencies pegged to traditional currencies such as the U.S. dollar have grown rapidly and are increasingly investing reserves in government bonds.

With the stablecoin market now worth roughly $300 billion and expanding, any loss of confidence in these assets could trigger large-scale sales of the bonds that back them. Such an event could add stress to already volatile financial markets.

At the same time, some investors remain concerned about high valuations and heavy market concentration in the rapidly growing artificial intelligence sector, which could amplify market volatility during periods of economic uncertainty.

Analysis: Oil Shock Could Trigger Wider Financial Stress

The Iran war oil shock illustrates how geopolitical crises can interact with financial vulnerabilities to create broader economic risks.

Higher energy prices directly increase inflation and strain household finances. At the same time, they can force central banks to reconsider interest-rate policies, potentially leading to higher borrowing costs and greater volatility in financial markets.

Such conditions could expose weaknesses in highly leveraged sectors of the financial system, particularly in shadow banking, hedge funds and digital financial markets.

Although previous shocks including the economic turmoil following Russia’s invasion of Ukraine did not ultimately trigger a major financial crisis, policymakers remain cautious. The brief turmoil in the U.S. regional banking sector in 2023 demonstrated how quickly financial stress can emerge when economic conditions shift.

If oil prices remain elevated and central banks are forced to respond aggressively, the resulting tightening of financial conditions could amplify existing vulnerabilities across markets.

For now, the disturbances appear manageable. But the combination of geopolitical conflict, energy market disruption and financial fragility ensures that central banks will continue to watch the situation with increasing concern.

With information from Reuters.

The war involving Iran, United States and Israel is increasingly affecting energy supplies far beyond the Middle East, with Bangladesh now scrambling to secure fuel imports after disruptions to regional shipping routes.

Bangladeshi officials say the country has begun receiving diesel shipments from suppliers including China and India, allowing authorities to secure enough fuel to meet roughly one month of national demand. Arrangements are also being made to secure supplies for an additional month.

The South Asian nation of about 175 million people depends heavily on imported energy, with roughly 95% of its fuel requirements sourced from abroad. The disruption of Middle Eastern oil flows following the war has therefore exposed Bangladesh to severe supply risks.

Fuel Rationing and Economic Disruptions

To manage the supply shortage, authorities have introduced emergency measures including fuel rationing for vehicles, restrictions on diesel sales and the temporary closure of universities.

Energy shortages are also affecting Bangladesh’s critical export industries. The country is the world’s second-largest clothing exporter after China, and many garment factories rely on diesel-powered generators during power outages.

Industry leaders say the situation has worsened since the conflict began in late February. Power cuts have doubled to as much as five hours per day, forcing factories to rely more heavily on backup generators.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said many companies are struggling to obtain sufficient diesel to keep their operations running during electricity outages.

The shortages threaten to disrupt production in one of Bangladesh’s most important economic sectors, which accounts for the majority of the country’s export earnings.

Emergency Diesel Shipments Arrive

To stabilise supplies, the state-run Bangladesh Petroleum Corporation (BPC) has arranged diesel shipments from international traders.

Energy officials say around 60,000 metric tons of diesel are currently being delivered by three trading companies, with another 90,000 metric tons expected to arrive later this month.

A cargo of approximately 27,000 metric tons from PetroChina has already arrived at Chittagong Port, while another shipment of roughly 28,000 metric tons from Vitol is waiting at the port’s outer anchorage.

Additional supplies are also arriving through a cross-border pipeline from India’s Numaligarh Refinery, which is currently providing about 5,000 metric tons of diesel. Officials said negotiations are underway to secure a further 30,000 metric tons from Indian Oil Corporation.

Bangladesh typically consumes about 380,000 metric tons of diesel each month. However, officials estimate that rationing measures have reduced current demand to around 270,000 metric tons per month.

Oil Imports Threatened by Hormuz Disruptions

While refined diesel cargoes have continued to arrive, Bangladesh faces greater risks in securing crude oil shipments for its domestic refineries.

The country imports about 1.4 million metric tons of crude oil annually under long-term supply agreements with Saudi Aramco and Abu Dhabi National Oil Company.

However, shipments from these suppliers must travel through the strategically vital Strait of Hormuz, which has been heavily disrupted by the war. Officials say at least one cargo of around 100,000 tons from Saudi Aramco has already been delayed in the Gulf due to the ongoing crisis.

The Strait of Hormuz is one of the world’s most important energy transit routes, and any prolonged disruption could have far-reaching consequences for countries heavily dependent on imported fuel.

Gas Shortages Add to Energy Crisis

Bangladesh’s energy difficulties extend beyond diesel shortages. Severe natural gas shortages have already forced the closure of four of the country’s five state-run fertiliser factories.

Authorities have redirected the available gas supply toward electricity generation in an effort to stabilise power production during the crisis.

The combination of diesel shortages, disrupted oil imports and limited gas supplies is placing growing pressure on Bangladesh’s energy system at a time when global fuel markets are already experiencing heightened volatility.

Analysis: Energy Dependence Exposes Economic Vulnerability

Bangladesh’s struggle to secure diesel supplies illustrates how the war involving Iran is affecting energy-importing economies far beyond the immediate conflict zone.

Countries that rely heavily on imported fuel are particularly vulnerable to disruptions in global energy shipping routes, especially those linked to the Strait of Hormuz. Even temporary interruptions can lead to fuel shortages, higher prices and broader economic disruption.

For Bangladesh, the situation highlights the structural risks created by its dependence on imported energy. Industries such as garments, which rely on stable electricity supplies and backup diesel generators, are especially exposed to supply shocks.

Although emergency shipments from China and India have temporarily stabilised supplies, the situation remains fragile. If the conflict in the Middle East continues to disrupt oil shipments or drive up prices, Bangladesh could face prolonged energy shortages with significant implications for its economy and export industries.

With information from Reuters.

Warning comes as 400 million barrels of oil are being released from global reserves during waterway’s closure.

Iran’s Islamic Revolutionary Guard Corps (IRGC) says it will not allow “a litre of oil” through the Strait of Hormuz as the closure of the key Gulf waterway continues to roil global energy markets during the US-Israeli war on Iran.

A spokesperson for the IRGC’s Khatam al-Anbiya Headquarters said on Wednesday that any vessel linked to the United States and Israel or their allies “will be considered a legitimate target”.

“You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” the spokesperson said in a statement. “The price of oil depends on regional security, and you are the main source of insecurity in the region.”

Global oil prices have fluctuated wildly this week during continued US-Israeli attacks against Iran, which has retaliated by firing missiles and drones at targets across the wider Middle East.

The closure of the Strait of Hormuz, through which about one-fifth of the world’s oil supplies transit, and production slowdowns in some Gulf countries have raised concerns of further disruptions.

Concerns around the duration of the war, which began on February 28 and has shown no sign of abating, are also adding to uncertainty, sending oil prices soaring.

On Wednesday, three ships were hit by projectiles in the Strait of Hormuz, maritime security and risk firms said, including a Thai-flagged cargo vessel that came under attack about 11 nautical miles (18km) north of Oman.

Release of oil reserves

World leaders, including members of the Group of Seven (G7) and the European Union, have been mulling what action to take in response to the war’s impact on global economies.

Christian Bueger, a professor of international relations at the University of Copenhagen and an expert in maritime security, said Europe will be facing “a major energy supply crisis” if the Strait of Hormuz is not reopened.

“For the shipping industry right now, it’s impossible to go through the Strait of Hormuz,” Bueger told Al Jazeera. “And if there are not stronger signals in the near future that they can at least try to go through the strait, then we are looking at a major shipping crisis, which can last weeks if not months.”

On Wednesday, the International Energy Agency (IEA) announced that its 32 member countries had unanimously agreed to release 400 million barrels of oil from their emergency reserves to try to lower prices.

“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” IEA Executive Director Fatih Birol said during an address from the agency’s headquarters in Paris.

“But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz,” he added.

The reserve supplies will be made available “over a timeframe that is appropriate” for each member state, the IEA said in a statement without providing details.

German Economy and Energy Minister Katherina Reiche said earlier in the day that the country would comply with the release while Austria also said it would make part of its emergency oil reserve available and extend its national strategic gas reserve.

Meanwhile, Japan’s Ministry of Economy, Trade and Industry said it would release about 80 million barrels from its private and national oil reserves.

Japanese Prime Minister Sanae Takaichi said the country, which gets about 70 percent of its oil imports through the Strait of Hormuz, would begin releasing the reserves on Monday.

Motorists around the globe are already feeling the impact of the United States and Israel’s war on Iran, with fuel prices sharply rising since the war began.

In the US, a gallon of regular petrol that averaged $2.94 in February now costs $3.58, marking a 20 percent increase, according to data from AAA Fuel Prices, a retail fuel price tracker from the American Automobile Association (AAA).

While each US state sets its own petrol prices, several states have surpassed $4 per gallon, with California exceeding $5 per gallon, the highest level it has been in more than two years.

Which countries have the sharpest petrol price increases?

According to data analysed from Global Petrol Prices, a data platform that tracks and publishes retail energy prices across approximately 150 countries, at least 85 countries have reported increases in petrol prices following the initial attacks on Iran by the US and Israel on February 28. Some nations announce price changes only at the end of each month, so higher prices are expected for many others in April.

Vietnam recorded the highest petrol price increase of nearly 50 percent, rising from $0.75 per litre of 95-octane on February 23 to $1.13 on March 9. Laos follows with a 33 percent increase, then Cambodia at 19 percent, Australia at 18 percent, and the US at 17 percent.

The table below shows the countries that have increased petrol prices at the pumps.

Asian countries pay the biggest price

Asia is disproportionately dependent on the Strait of Hormuz for the delivery of its oil and gas, which has been effectively closed since the start of the war. The strait joins the Gulf – also referred to as the Persian Gulf and the Arabian Gulf – to the Gulf of Oman and is the only passage for the region’s oil producers to the open ocean.

Japan and South Korea are among the most vulnerable, importing 95 percent and 70 percent of their oil from the Gulf, respectively.

Both East Asian nations have enacted emergency measures to stabilise their energy markets. On March 8, Japan instructed its oil reserve sites to prepare for a potential release of strategic reserves. The next day, South Korea introduced a maximum price cap on petrol and diesel for the first time in 30 years.

In South Asia, the impact of the war is more severe than in East Asia because countries like Pakistan and Bangladesh have much thinner financial buffers and smaller strategic reserves.

In an attempt to conserve energy, Bangladesh‘s government has ordered all public and private universities to close immediately. In Pakistan, government offices will now operate a four-day workweek, while schools have closed, and a 50 percent work-from-home policy has been enacted to save fuel.

In Europe, the Group of Seven finance ministers convened an emergency meeting to discuss rising prices, with French President Emmanuel Macron raising the possibility of releasing 20-30 percent of emergency strategic reserves to ease the pressure on consumers.

How high oil costs drive up the price of food

Oil prices and food prices move in lockstep, with energy prices affecting every stage of the food supply chain, from the fertilisers used in the fields to the trucks that carry food from field to supermarket shelf.

Rising oil prices also directly affect shipping and the cost of transport.

“The lifeblood of the global economy is transport,” economist David McWilliams told Al Jazeera. “It’s getting stuff from A to B – it’s a logistics problem, a supply chain problem, and ultimately transportation is the energy of the global economy.”

Fears of stagflation – increasing inflation and rising unemployment, which major oil shocks have historically summoned – are rising. Economists point to the crises of 1973, 1978 and 2008 as evidence that every significant spike in oil prices has been followed, in some form, by global recession.

In lower-income countries, where populations spend a far greater share of their income on food and import large quantities of grain and fertiliser, rising oil prices could rapidly translate into food shortages.

What products are made from oil and gas?

Oil and gas are used for far more than just fuel. They are raw materials for thousands of everyday products.

Plastics, including water bottles, food packaging, phone casings and medical syringes, are all derived from crude oil.

Crude oil is also the hidden ingredient in synthetic fabrics such as polyester, nylon and acrylic, which are used to make everything from sportswear to carpets. It also underpins the cosmetics industry, as it is used to make products such as petroleum jelly (Vaseline), lipsticks and concealers.

Household items also rely on oil-based ingredients, with laundry detergents, dishwashing liquids, and paints all derived from petroleum products.

The global food supply is essentially built on natural gas in the form of fertilisers, used to enhance crop yields and ensure that food production can meet demand.

G7 energy ministers will hold a call on Tuesday to discuss sharply rising energy prices triggered by the ongoing war in Iran, officials said. A separate call later in the day will see European Union leaders addressing similar concerns, reflecting heightened global anxiety over fuel supply and costs.

Oil prices surged to their highest levels since mid-2022 on Monday, driven by fears of reduced Gulf output and disruptions to tanker traffic through key shipping routes. Even before the Iran conflict, European energy prices were generally higher than those in the United States and China.

G7 Prepares Response, But Stops Short of Releases

G7 finance ministers signalled readiness to take “necessary measures” in response to the price surge but did not commit to coordinated emergency releases of strategic oil reserves.

The G7, which includes United States, Canada, Japan, Italy, Britain, Germany, and France, will hold the call at 1245 GMT. French Finance Minister Roland Lescure, whose country holds the G7 presidency this year, said that Europe and the U.S. currently do not face immediate supply shortages.

EU Leaders Target Competitiveness and Energy Costs

Later on Tuesday, EU leaders will discuss energy prices and competitiveness, joining German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni, Belgian Prime Minister De Wever, and others.

The EU is highly exposed to global energy volatility, importing more than 90% of its oil and roughly 80% of its gas. EU Commission President Ursula von der Leyen has pledged proposals at next week’s EU summit to address rising prices.

Officials have already discussed measures including adjustments to energy taxes and potential amendments to the EU carbon price, which contributes around 11% to industrial power costs.

Coordinated Action Sought but Uncertain

The calls by the G7 and EU reflect a growing urgency to manage energy price shocks caused by the Iran war. While governments have the tools to intervene, officials are balancing the need to stabilize prices with broader fiscal and strategic considerations.

With oil and gas markets highly sensitive to geopolitical developments, both G7 and EU leaders face pressure to act quickly to prevent price spikes from translating into economic slowdowns or political unrest across their regions.

With information from Reuters.

Iran has significant oil and gas reserves, and is a key supplier to China.

A member of US President Donald Trump’s inner circle has said control of those reserves is a key United States aim amid the country’s war against Iran.

So, how valuable are Iran’s natural resources? And could they be a factor in US thinking?

Presenter: Imran Khan

Guests:

Foad Izadi – Professor in the faculty of world studies at the University of Tehran

Mohammad Reza Farzanegan – Professor of Middle East economics at Marburg University

Paolo von Schirach – President of the Global Policy Institute, an independent think tank

International Energy Agency chief says talks aim to assess conditions as US-Israel war on Iran fuels global uncertainty.

The International Energy Agency (IEA) is set to hold an emergency meeting to assess the situation in the Middle East as the US-Israeli war on Iran continues to roil global energy markets.

Fatih Birol, the agency’s executive director, said representatives of IEA member states would meet on Tuesday to assess “the current security of supply and market conditions” amid the conflict.

“I have convened an extraordinary meeting of IEA member governments, which will take place later today to assess the current security of supply and market conditions to inform a subsequent decision on whether to make emergency stocks of IEA countries available to the market,” Birol said.

This week, oil prices hit their highest levels since mid‑2022 amid concerns of prolonged shipping disruptions linked to the war and reduced output from some key producers in countries that have been targeted by retaliatory Iranian strikes.

While the market reversed late in the day on Monday, with benchmarks falling below $90 a barrel, uncertainty persists around how long the United States-Israel war will drag on.

The Strait of Hormuz, a critical Gulf waterway through which about one-fifth of the world’s oil supplies passes, has effectively been shut down as a result of the war.

“If this drags on, it is not just going to be energy prices” that are affected, Al Jazeera’s Osama Bin Javaid explained. “It is going to have an impact on global economies.”

Bin Javaid noted that the extraordinary IEA meeting comes after Group of Seven (G7) countries met to discuss possible actions to help stabilise global energy markets.

European governments have been on edge about the prospect of a repeat of the energy crisis they faced in 2022, when prices surged to record peaks after Russia’s full-scale invasion of Ukraine.

“The IEA will ⁠be presenting an ⁠in-depth analysis of the pros and ⁠cons of releasing stocks ⁠now,” the European Union’s Energy Commissioner ‌Dan Jorgensen said before the agency’s meeting.

Earlier on Tuesday, G7 energy ministers stopped short of deciding on the release of strategic oil reserves in a call, instead asking the IEA to assess the situation before acting.

“Everyone is willing to take measures to stabilise the market, including the United States,” French Finance Minister Roland Lescure told reporters after the latest talks.

“We have asked the IEA to elaborate scenarios for a potential oil stock release; we need to be ready to act at any moment,” he added.

EU leaders also will discuss competitiveness, including energy prices, on a call later in the day with German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni, Belgian Prime Minister Bart De Wever, and others.

Antonio Costa says Russia benefits from soaring global energy prices and attention being diverted from war in Ukraine.

European Council President Antonio Costa has said Russia is the only country benefitting from the US-Israeli war on Iran, as global energy prices soar and attention from Moscow’s four-year conflict with Ukraine is diverted.

Now in its 11th day, the war has spiralled rapidly throughout the region as Iranian forces hit back at US and Israeli targets, as well as facilities in the Gulf. It has also slowed oil and natural gas flows through the strategic Strait of Hormuz to a near standstill, pushing fuel prices upwards and threatening far-reaching impacts on a number of industries.

“So far, there is only one winner in this war – Russia,” Costa said in a speech to European Union ambassadors in Brussels on Tuesday.

“It gains ‌new resources to finance its war against Ukraine as energy prices rise. It profits from the diversion of military capabilities that could otherwise have been sent to support Ukraine. And it benefits from reduced ⁠attention to the Ukrainian front ⁠as the conflict in the Middle East takes centre stage.”

Costa stressed the need for the EU to protect ⁠the international rules-based order, which he said was now being challenged ⁠by the United States, ⁠and for all parties in the Middle East to return to the negotiating table.

“Freedom and human rights cannot ‌be achieved through bombs. Only international law upholds them,” he said. “We must avoid further escalation. ‌Such ‌a path threatens the Middle East, Europe, and beyond.”

The US and Israeli attack on Iran triggered the biggest spike in oil prices on Monday since the turmoil following Russia’s invasion of Ukraine in 2022.

Costa’s comments came as the Kremlin said all parties wanted to continue US-mediated Russia-Ukraine peace talks, but that no date or venue had been agreed yet for the next round.

Russia and Ukraine held three rounds of talks in Turkiye last year and have conducted several more US-mediated sessions in Abu Dhabi and Geneva this year. But they remain far apart on key issues, especially on Russia’s demand for Ukraine to cede control of the whole of its eastern Donetsk region.

On Monday, US President Donald Trump and his Russian counterpart, Vladimir Putin, held their first phone call of the year, during which they discussed the wars in Iran and Ukraine.

The Kremlin said the possibility of lifting US sanctions on Russian oil had not been discussed in any detail with Washington, but that US actions were aimed at stabilising global energy markets.

Following this call, Putin said Russia, the world’s second-largest oil exporter and holder of the biggest natural gas reserves, was ready to work again with European customers if they wanted to return to long-term cooperation.

Before the Ukraine war, Europe was buying more than 40 percent of its gas from Russia. By 2025, combined sales of pipeline gas and LNG from Russia accounted for only 13 percent of total EU imports.

Also on Monday, Trump said his administration would lift some sanctions on oil-producing countries to keep energy prices down – though he did not say which ones.

Washington currently maintains sanctions on the oil sectors of Russia, Iran and Venezuela.

The Reuters news agency, citing multiple unnamed sources, reported that Trump was considering easing sanctions on Russia as part of his plans to keep oil prices down.

US Treasury Secretary Scott Bessent last week announced a 30-day waiver on sanctions on Russian oil sales to India to help it cope with the cuts to Middle East supply.

Surging energy prices caused by the US-Israel war on Iran could ripple across the United States economy, heaping further strain on consumers at a time when cost-of-living issues are already a primary concern.

The price of crude oil increased from about $67 per barrel before the war began on February 28 to nearly $97 on Monday, as the conflict snarls production and transport in one of the most energy-rich regions on earth. Oil temporarily passed $100 per barrel on Sunday before slightly easing back.

The price tracker GasBuddy reported on Monday that the average price of gas in the US has risen by 51 cents per gallon over the last week.

“Yes, yes, definitely,” said 52-year-old Alma Newell when asked if she was worried about price increases at a gas station in the coastal city of Goleta, California.

Newell said she is out of work with a shoulder injury and worried that rising costs could stretch her already limited budget.

“The prices have a big impact because I’m not working right now,” she said. “Food and rent are already very expensive.”

“It’s crazy,” she added. “Because the war is so unnecessary.”

Cost of living issues

Rising prices could deepen frustration with the administration of US President Donald Trump and put greater political pressure on the White House, already struggling to address cost-of-living issues with the crucial midterm elections set to take place later this year.

“I think the current price increase in oil suggests the US will see $3.50 to $4 gasoline by next week, and $5 diesel this week,” said Gregory Brew, a senior analyst on Iran and oil at the Eurasia Group.

The highest recorded average for gas prices at the pump was in June 2022, when prices soared to $5.034, months after the Russian war on Ukraine started, according to Gas Buddy, which tracks fuel prices going back to 2008.

“The impact 1773123967 is more political than economic, as high gasoline prices generate negative press and can add to the perception that the government is not properly handling the economy. That means Trump will feel more political pressure to end this war quickly.”

A Pew Research Center poll in early February suggested widespread anxiety about the rising cost-of-living before the US and Israel launched attacks on Iran, with 68 percent of respondents saying they were very or somewhat concerned about gas prices.

“I’m not too worried myself because I have a hybrid car and ride my bike,” said 72-year-old Bjorn Birmir at the gas station in Goleta, California. “But for people in general, it will make life more expensive. Prices are already high, and it will make them even higher.”

Ongoing disruptions

The disruptions caused by the war include the shuttering of the Strait of Hormuz, a key node in global transit and shipping. Iran has long said that it could close down the strait in the event of a showdown with the US and Israel.

About 20 percent of global oil and a significant portion of natural gas pass through the strait, predominantly to Asia, supplies that are now stranded as traffic through the narrow waterway has ground to a halt. Iranian attacks on energy infrastructure in countries across the region have also led some countries to scale back production.

Other economic sectors are also feeling the squeeze.

Goods such as fertiliser, vital for agricultural production, are seeing price increases just ahead of the spring planting season in the Northern Hemisphere. About one-third of the global fertiliser trade passes through the Strait of Hormuz.

Effects of the war could ripple throughout the global economy, with poor countries especially hard-hit. Pakistan announced a series of austerity measures and cuts to fuel subsidies on Monday, while Bangladesh shuttered universities and announced restrictions on fuel use as a result of the war.

US officials and countries around the world have already discussed measures to help ease the shock of rising energy prices, including the potential release of strategic oil reserves in a bid to temporarily boost global supply.

The G7 said on Monday that it would take “necessary measures” to support energy supplies, but held off on announcing the release of strategic reserves, with energy ministers set to meet on Tuesday to discuss the matter further.

The US has a strategic oil reserve of more than 415 million barrels, one of the largest in the world, that it could release in coordination with allied countries.

But it is unclear when these measures would kick in and how long such steps could help fill the gaps created by the war.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, says that much depends on whether the war is brought to a speedy conclusion or continues on for weeks or even months, with the possibility of further escalation.

Thus far, neither the US and Israel nor Iran has suggested it are willing to stop the war anytime soon, although Trump told CBS News on Monday that “the war is very complete, pretty much”, comments that helped ease some of the price swings in oil and stocks.

“If the war continues, we would see oil prices not only remain elevated, but perhaps rally further as markets price in a more protracted outage,” said Ziemba. “There’s also the question of, when it does end, how much damage will be done to infrastructure and just how quickly supplies could come back online.”

Initial polling has suggested that the war is unpopular in the US, with a Quinnipiac University poll released on Monday finding that 53 percent of voters who responded oppose Trump’s military action in Iran, including 60 percent of political independents.

That lack of popular support could present a political headache for Trump and his Republican Party if voters connect the war to increasing prices. Thus far, Trump has largely dismissed concerns about the war’s possible impact on the rising cost of living.

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for USA, and World, Safety and Peace,” Trump said in a Truth Social post on Sunday. “ONLY FOOLS WOULD THINK DIFFERENTLY!”

Russian president spoke as oil prices surged past $100 per barrel, reaching levels unseen since start of Ukraine war.

Russian President Vladimir Putin has said that Russia is ready to conditionally supply oil and gas to Europe as the US-Israeli war on Iran brings shipments through the Strait of Hormuz to a halt.

The Russian president said in televised comments on Monday that Moscow was ready to work again with European customers, which largely stopped buying from his country in a bid to stop funding its war on Ukraine, if they wanted to return to long-term cooperation.

European countries, however, have spent the past four years sharply reducing their reliance on Russian oil and gas in response to Moscow’s war in Ukraine and subsequent European Union and Group of Seven (G7) sanctions.

The EU banned maritime imports of Russian crude in 2022, while Russia’s pipeline exports to Hungary and Slovakia have been effectively halted since January due to damage to the Druzhba oil pipeline via Ukraine.

“If European companies and European buyers suddenly decide to reorient themselves and provide us with long-term, sustainable cooperation, free from political pressures, free from political pressures, then yes, we’ve never refused it. We’re ready to work with Europeans too,” said Putin at a meeting with government officials and heads of Russia’s top oil and gas producers.

He said that Russian companies should take advantage of conflict in the Middle East, which has seen Iran effectively halt shipping in the Strait of Hormuz, one of the world’s key oil transit chokepoints that carries roughly a fifth of global oil and liquefied natural gas.

The Russian president spoke as oil prices exceeded $100 per barrel on Monday, reaching peaks unseen since he launched his country’s full-scale invasion of Ukraine in 2022.

Brent crude, the international benchmark, rose by more than 30 percent on Sunday, at one point topping $119 a barrel, as fears grew of prolonged disruption to global energy supplies.

G7 nations said on Monday that they were prepared to implement “necessary measures” in response to surging global oil prices, but stopped short of committing to release emergency reserves.

Putin’s comments came hours after Hungarian Prime Minister Viktor Orban urged the European Union to suspend sanctions on Russian oil and gas to counter prices sent soaring by the war in the Middle East.

Last week, Putin had instructed the government to consider switching remaining Russian oil and gas flows away from Europe, before the European Union starts enforcing its decision to completely ban Russian fossil fuels.

Before the Ukraine war, Europe was buying more than 40 percent of its gas from Russia. By 2025, combined sales of pipeline gas and LNG from Russia accounted for only 13 percent of total EU imports.

The loss of the European market during the Ukraine war forced Russia to sell oil and gas at steep discounts to Asia.

EU economy and finance ministers are gathering in Brussels on Monday and Tuesday to discuss how to respond to surging energy prices and anticipated inflation amid the ongoing strikes and counter-strikes in the Middle East.

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“We are ready to take necessary and coordinated steps in order to stabilise markets, such as strategic stockpiling,” French Economy Minister Roland Lescure told journalists on Monday after chairing a meeting of G7 finance ministers.

Asked whether G7 finance ministers had agreed on releasing the system’s strategic stockpile, Lescure said: “We are not there yet.”

“What we’ve agreed upon is to use any necessary tools to stabilise the market, including the potential release of necessary stockpiles. The work is going to keep being done in the next couple of days”, the French minister said.

German Vice-Chancellor Lars Klingbeil said on Monday that his country is open to unlocking the oil reserve, but that “this is not the right time”.

The International Energy Agency’s member countries currently hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation.

Oil prices have rocketed since the Israeli and US attacks on Iran on 28 February, which killed some 40 Iranian leaders, including the country’s supreme leader, Ayatollah Ali Khamenei. The conflict has now expanded into other countries in the region, including Lebanon and Gulf countries, with retaliatory attacks by Iran hitting civilian energy facilities and US bases.

Mojtaba Khamenei, the former Ayatollah’s son, was elected as successor on Monday, providing continuity in leadership for the current regime.

The price for a barrel of Brent crude, the international benchmark, surged to $119.50 early on Monday, but later traded around $107.80 after the Financial Times indicated that the use of reserve oil to respond to the crisis was on the table.

Leading European stock market indexes started the week with a big sell-off, following a major drop across Asian markets and surging oil prices.

The war is showing no sign of de-escalation. On 4 March, Qatar announced the suspension of its LNG production; then, over the weekend, Israel struck Iranian energy infrastructure while passage through the critical Strait of Hormuz remained suspended.

Energy prices in Europe will be affected, and inflation is likely to rise in the coming months. However, some EU diplomats and the European Commission indicates that the current situation presents significant differences from the energy crisis Europe experienced when the war in Ukraine started in February 2022.

“Thanks to the decisive actions we have taken over the past years, Europe’s energy system is better prepared and way more resilient today. Our energy sources are more diverse and cleaner. Our coordination is stronger,” European Commissioner for Energy Dan Jorgensen wrote on X on 6 March.

He called on the bloc to double down on the energy transition and continue to expand clean and homegrown renewable energy and energy efficiency efficients, all while modernising Europe’s energy infrastructure.

Spanish Economy Minister Carlos Cuerpo told journalists on Monday that the EU should take inspiration from the response to the 2022 crisis as it formulates its response to the war.

A different crisis?

This crisis is also structurally different from the one that exploded in 2022, an EU government official told Euronews.

When Russia’s full-scale invasion of Ukraine began, Europe needed an “infrastructure reset” with a new portfolio of suppliers, the official said – whereas in the current case, “the release of reserves and re-opening of routes could see prices going down faster”.

However, the situation remains extremely volatile, as it is highly dependent on when the Strait of Hormuz will reopen and when production will resume in top LNG-exporting countries.

Discussions on Monday and Tuesday among EU ministers are expected to touch upon energy prices with the European Commission, while euro-area ministers are set to discuss with the European Central Bank how the war could impact inflation and the overall macroeconomic outlook.

While EU ministers are not expecting to put forward a common strategy on the table by the end of the meetings, the EU institutions will present an update of the situation. Most of the member states will likely present their remarks based on their national assessment of the war’s impact, an EU diplomat told Euronews.

Maria Tadeo contributed reporting.

March 9 (UPI) — G7 finance ministers were set to hold an emergency meeting first thing Monday to discuss oil prices after Brent crude surged above $100 per barrel, with an option to release strategic reserves to calm the market on the table.

The virtual meeting, due to get underway at 8.30 EST, comes amid fears that disruption to oil and gas shipments from the Gulf via the Strait of Hormuz, which Iran has closed, could continue for some time, sending energy prices soaring and rattling financial markets.

The joint release of “emergency reserves,” if agreed, would be coordinated by the International Energy Agency, according to the Financial Times.

If G7 nations do release oil reserves, it would be the first time in four years since a crisis triggered by Russia’s full scale invasion of Ukraine triggered similar price shocks, although gas was hit the worst.

Exacerbated by escalating attacks on Gulf countries’ oil fields, refineries and storage plants — impacting their ability to produce and store product, as well as export it — Bent crude jumped more than 25% in Asian trade Monday, hitting a $119.50 per barrel high, before falling back with the price of West Texas Intermediate making similar moves.

Investors also reacted to fears that the crisis will push inflation and borrowing costs higher, with negative impacts for the global economy.

The key Nikkei 225 index in Japan slumped by more than 5% to end Monday down 2,892 points lower, with the jitters spilling over into Europe when the markets there opened.

At lunchtime Monday, the FTSE 100 in London was down 1.4%, Germany’s DAX was down 1.6% and the CAC 40 in Paris was off by more than 2.2%.

Former IEA head Neil Atkinson warned that unless there was a resolution to the situation in the Gulf and flows of oil resumed “very soon” the world faced a “potentially game-changing and unprecedented energy crisis,” even if the reserves were made available.

“Though there are oil stocks around the world, the point is that if this closure of the Strait persists, those oil stocks if they are deployed will be depleted and we are going to be in a situation where, with the oil production actually shut in, in Iraq and possibly in Kuwait and maybe even in time in Saudi Arabia, that we are going to be in a crisis the likes of which we have never seen before,” Atkinson told CNBC.

DEVELOPING STORYDEVELOPING STORY,

Crude oil prices rise by as much 20 percent as sprawling regional conflict threatens global energy supplies.

Oil prices have surged past $100 a barrel for the first time since Russia’s invasion of Ukraine, amid the widening fallout of the United States and Israel’s war on Iran.

Brent crude, the global benchmark, rose by as much as 20 percent on Sunday, topping $111 a barrel, as fears grew of prolonged disruption to global energy supplies.

US President Donald Trump, who campaigned heavily on cost-of-living concerns in the 2024 election, brushed off the surge.

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump said in a post on Truth Social.

“ONLY FOOLS WOULD THINK DIFFERENTLY!”

Crude oil prices have surged by about 50 percent since the US and Israel launched joint strikes on Iran on February 28.

Iranian threats and attacks in response have brought an effective halt to shipping in the Strait of Hormuz, a conduit for about one-fifth of the global oil supply.

Iraq, the United Arab Emirates and Kuwait, three of the biggest producers in The Organization of the Petroleum Exporting Countries (OPEC), have been forced to cut production amid dwindling crude storage capacity due to the collapse of shipping through the waterway.

Iran and Israel have also launched strikes on key energy facilities in Iran amid the sprawling regional conflict.

Stocks in Asia fell sharply on Monday morning, as investors braced for the fallout of rising energy prices.

Japan’s Nikkei 225 plunged about 6 percent in early trading, while South Korea’s KOSPI tumbled nearly 7 percent.

US stock futures, which are traded outside regular market hours, also saw substantial losses.

Futures tied to Wall Street’s benchmark S&P 500 were down by 1.7 percent, while those for the tech-heavy Nasdaq Composite fell by 1.90 percent.