Oil and Gas

Several Gulf energy producers have declared force majeure on oil and gas shipments after disruptions to shipping through the Strait of Hormuz due to the US-Israeli war on Iran. Al Jazeera’s Alma Milisic explains what the legal term means and how it could affect global energy markets.

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.

“The US Navy at this point can’t even get anywhere close to the Strait of Hormuz without being attacked.” Experts are pouring cold water on Pete Hegseth’s claims that the US is working effectively to reopen the world’s most crucial shipping lane.

Pointe-Noire and Brazzaville, Republic of Congo – In Pointe-Noire, the economic capital of the Republic of Congo, the aisles of the Grand Marche come alive in the early hours of the morning. Among the market stalls, street vendors, and shoppers pushing their way through the crowd, Romain Tchicaya is selling medicines on the sly.

As the price of basics – including pharmaceutical products – rises, and people turn to more affordable unregulated options, merchants like Tchicaya step in to fill the gap while trying to earn a living in a struggling economy.

However, the 37-year-old’s background is far from typical for a street vendor.

With a degree in management, he thought he would find a stable job after graduating from university. But like many young Congolese, he found himself facing a tight job market with few opportunities.

“We are told that the country is rich in oil. But I don’t see that wealth in my daily life,” he told Al Jazeera. “Look at Pointe-Noire, formerly nicknamed as Ponton la Belle [Beautiful Pointe-Noire]. Today, the city is unrecognisable.”

Around the Grand Marche, the main roads are potholed, and when it rains, the streets get flooded, making it almost impossible to drive.

Like Tchicaya, Brice Makaya, in his 40s, has never managed to find a stable job here despite having a degree in computer science.

With no stable employment, he is unable to rent a house and now lives outside the church where he prays.

“I am still underhoused at my age and have no prospects for the future,” he told Al Jazeera. “Without a job, I can’t plan ahead. I’m just trying to survive.”

For many young Congolese, daily life is a paradox: though they live in a resource-rich country – the third largest oil producer in sub-Saharan Africa and a producer of liquefied natural gas (LNG) – nearly half the population live below the poverty line.

This Sunday, Congo goes to the polls in which President Denis Sassou Nguesso, 82, is again seeking another term. For young voters, jobs and the economy are a big concern. But for the government, there appear to be limitations to what is possible.

During one of his speeches in the election campaign, Nguesso pointed out that the civil service could not absorb all job seekers, and urged young people to take charge of their own futures by encouraging self-employment.

Oil: ‘Fuel of the political system’

According to the World Bank, oil accounts for about 70 percent of Congo’s exports and nearly 40 percent of its gross domestic product (GDP).

But this wealth does not automatically translate into an improvement in living standards for most of the populace.

The World Bank estimates that more than 40 percent of Congolese people live below the poverty line, despite the country’s significant natural resources.

For economist Charles Kombo, this can be explained in large part by the very structure of the Congolese economy, which is dependent on oil revenues.

“Oil dependency plays a structuring role in many African economies. In what some call a ‘rentier state’, a large part of public resources comes from the exploitation of natural resources rather than taxation,” he explained.

In a rentier state, the country generates substantial revenue from “renting out” natural resources, such as oil, to foreign companies. In exchange for the exploitation rights granted on these resources, the state receives royalties, taxes, or a share of production.

In this type of system, Kombo explains, the management of revenues becomes central to political power.

“Control of this revenue often reinforces institutional centralisation,” he said, explaining that dependence is no longer solely economic, but becomes institutional and sometimes psychological, as it influences budgetary priorities, political strategies, and even perceptions of development.

He points out that when the economy relies heavily on extractive revenues, economic and political resources tend to become intertwined, which can limit electoral competitiveness.

“Oil revenues can generate significant income, but they do not guarantee the structural transformation of the economy,” he said.

This oil dependence also exposes the country to fluctuations in oil prices on international markets.

After the fall in crude oil prices in 2014, the Congolese economy experienced a severe crisis. Public debt exceeded 90 percent of GDP, before being restructured under agreements with the International Monetary Fund and several international creditors.

Although this has helped stabilise the macroeconomic situation, the country remains heavily indebted. According to the World Bank, public debt fell from 103.6 percent of GDP in 2020 to about 93.6 percent in 2024, reflecting a gradual improvement, but also the continued vulnerability of Congo’s economy to fluctuations in global oil prices.

For political analyst Alphonse Ndongo, oil revenues also influence political life in Congo.

“Oil has become the fuel of the political system. It is used to finance parties, co-opt elites, and maintain social balance,” he said.

According to him, “oil money comes easily and quickly”, but this financial windfall has long delayed necessary structural reforms such as economic diversification.

In his view, the steady flow of money from the oil sector can create a sense of complacency within the system, reducing the pressure to pursue deeper structural reforms. As a result, debates around economic diversification tend to emerge mainly during periods of financial stress, when falling oil prices expose the limits of the model. But when revenues rise again, he argues, the urgency to diversify often fades, leaving the economy heavily dependent on the same resource.

‘An uphill battle’

As the country’s oil wealth fails to filter to the majority of the population, young people are particularly affected and many face unemployment.

According to data from the World Bank and the International Labour Organization, the youth unemployment rate in Congo is among the highest in Central Africa, while the informal sector absorbs the majority of new entrants to the labour market.

During a news conference on March 4 in Brazzaville, Prime Minister Anatole Collinet Makosso, who is also spokesperson for presidential candidate and incumbent leader Nguesso, said that young people were at the heart of the government’s policy.

“Youth has always been at the centre of Denis Sassou Nguesso’s policies and social projects,” he said, citing investments in education and the construction of universities.

He also claimed that the unemployment rate had fallen from 44 percent to 39 percent in recent years.

But on the ground, many young people remain sceptical.

Landry, 23, a student in the capital Brazzaville who did not want to give his last name, says he has lost faith in political promises.

“Promises of jobs come back every election. It’s become a cycle,” he said.

A months-long strike at Marien Ngouabi University, the country’s main institution of higher education, forced him to interrupt his studies.

“I went back to my parents’ house to wait and see what I could do. Today, I’m seriously thinking about going abroad.”

Another student in Brazzaville, a 26-year-old woman who did not want to give her name, expressed similar frustration.

“The only sector that is really recruiting today is the army. But not everyone can become a soldier. Becoming a civil servant is also an uphill battle,” she said.

Even sectors that are supposed to be structured are not immune to precariousness. Regine, a young journalist who also did not want to provide her last name, said she works without a stable employment contract.

“In the media, many young people live off ‘camora’, one-off payments for services. It’s not a real salary.”

She also lamented the difficulties of everyday life, including infrastructure issues, such as power cuts and inconsistent water supplies, despite repeated government investment plans.

“In the 21st century, people rejoice when the electricity comes back on. And when the water finally flows, everyone rushes to fill buckets,” she said.

‘Social time bomb’

Congo’s infrastructure problems are a reminder to Regine and many others that economic difficulties go beyond the issue of employment.

At the same time, the consequences of the country’s youth employment crisis also reverberate more widely and into the social sphere.

Analyst Ndongo sees this as a potentially explosive situation.

“When there are large numbers of young people who are unemployed and have no prospects, it can become a social time bomb,” he said.

This dynamic is already visible in the tensions that emerge when unemployment and inequality intersect, Ndongo explained: As large numbers of young people struggle to find work while wealth linked to the oil sector remains visible, frustration can build among those excluded from economic opportunities.

He says pressure can be contained for a time, but without meaningful job opportunities and stronger education systems, resentment may deepen. Over time, he warns, groups of unemployed and poorly trained youth can become more vulnerable to crime or gang activity.

The Congolese population is very young: more than 60 percent of people are under 25, according to United Nations data. This demographic reality represents both economic potential and a major challenge for the authorities.

For economist Kombo, the issue goes far beyond just unemployment.

“Demographics are a major political factor in many African countries. When the population is predominantly young, expectations for employment and social mobility are particularly high.”

According to him, long-term political stability will depend on the ability to create economic opportunities.

“Development is not distributed,” he said, “it is built.”

Despite the frustrations, political mobilisation remains limited, even as several candidates rally to compete against Nguesso in this weekend’s vote.

Chris Taty, a young student in Brazzaville, says he is not interested in the current election, as it is clear that the president who has already been in power for more than 40 years will once again reign supreme.

“Everyone already knows who is going to win. So why bother voting? I’d rather stay at home and do other things,” he said.

“Sometimes we joke that Sassou [Nguesso] is our grandfather,” the young journalist Regine said. “He has been ruling for so long that many of us have never known another president”

Nguesso has been a dominant figure in Congolese politics for decades, first ruling the country from 1979 to 1992 before returning to power in 1997 following a brief period out of office. His long tenure has enabled him to consolidate influence over key state institutions. Meanwhile, analysts say the country’s opposition remains fragmented and lacks the organisational capacity to pose a strong challenge.

For some potential voters, the perception of a largely predictable outcome has contributed to a degree of political disengagement, which Ndogo says is a “feeling of resignation”.

“Resignation is ingrained in everyone … Students, politicians, intellectuals … everyone is forced to scramble for a piece of the pie,” he said.

“We are all lulled into resignation because we tell ourselves that if we stand up against the established order, against those in power, we risk ending up in prison or even six feet under. It’s risky to oppose the system today.”

This combination of economic frustrations and limited political participation is a main challenge facing Congo, observers say. And the issue of youth unemployment risks becoming a major crisis in the coming years if nothing is done to fix it.

For many educated yet underemployed young people in the oil-rich country, the question is whether or not Congo can transform its natural wealth into concrete opportunities for its people.

“We are not asking for much,” said Regine. “Just the chance to work, to live in our own country with dignity and to believe that our future can be built here, without connections, with equal opportunities for young people, and without conditions.”

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.

New York City, United States – Rising prices on the back of US-Israel strikes on Iran are adding to the economic pressure facing US consumers despite efforts by US President Donald Trump to paint the war as a success.

On Wednesday, Trump declared, “We won – in the first hour it was over.”

Trump’s declaration comes even as the Strait of Hormuz remains closed, cutting off oil from the Gulf amid warnings from Iran, which continues to strike ships, that oil could reach $200 per barrel.

Oil prices spiked above $100 per barrel on Sunday and again today.

The magnitude of the economic pressure on consumers will depend on how long the war lasts and, crucially, how soon shipping traffic can return to the Gulf.

“If it drags on and especially if it remains at this intensity, prices will be higher, and more volatile for consumers,” said Rachel Ziemba, an adjunct senior fellow at the think tank Center for a New American Security.

“If it ends quickly, and it’s a credible and stable end, then we could see prices fairly quickly normalising”.

If the war lasts more than a few weeks, however, observers say the US economy is more likely to see deepening impacts, like 1970s-style “stagflation” or a recession.

When might we see a recession?

On Thursday, the International Energy Agency said in a report that “the war in the Middle East is creating the largest supply disruption in the history of the global oil market.”

According to Sam Ori, who directs the Energy Policy Institute at the University of Chicago, in the past, when oil prices have reached 4 percent to 5 percent of gross domestic product and stayed elevated, “that’s always triggered a recession.”

The US will not hit that threshold as quickly as it would have in the 1970s, when its economy was more deeply dependent on foreign oil, Ori said, but added he expected a recession if prices remained about $140 a barrel for most of the year.

Alternatively, “the indefinite closure of the Strait of Hormuz would so vastly exceed that number, it would not take a year,” he said.

Ori, who used to run an oil shock war game for US officials, said he would have been “laughed out of the room” if he had proposed a scenario where the strait was closed for six months, because many analysts see it as “too big to fail”.

Ori says that assessment is still likely, but recent developments “are chipping away at that level of certainty”.

The Gulf, which separates the Arabian Peninsula and Iran, provides more than one-fifth of the world’s oil supply via tanker ships through the Strait of Hormuz.

The severity of that threat to the global economy is the “strongest indicator that this is going to get resolved pretty fast, because it’s impossible to fathom what would happen if it didn’t”, Ori said.

He added that the conflict has now entered a phase in which it may be moving out of US control, especially as some countries have turned off the oil wells as they run out of storage.

While those events have now been baked into oil prices, the things that he is on the lookout for include “successful mining of the strait, some kind of structural blockage, or a battlespace development that binds the US into a longer, drawn out conflict”, outcomes that could signal a total loss of the strait for an unknown amount of time and create the “conditions for a complete meltdown”.

Higher prices

The war is already driving petrol prices up for US consumers.

Patrick DeHaan, who leads petroleum analysis for the app GasBuddy, said that the national average as of Wednesday is now $3.59 per gallon ($0.95 per litre) – up 65 cents since February.

The highest increases are near the coasts, where US petrol, diesel and jet fuel supplies are more easily diverted to meet global demand, according to DeHaan.

An end to the conflict could lower petrol prices within weeks, DeHaan said, but “every week that this goes on, we could see another 25 to 40 cent increase”.

Robert Rogowsky, an adjunct professor at Georgetown University’s School of Foreign Service, said lower-income people in particular, “will pay the price for this inflationary burst”.

As the war continues, it will also nudge up prices for consumer goods.

Peter Sand, chief analyst for freight intelligence platform Xeneta, said the backup at the Strait of Hormuz is already causing congestion at ports worldwide.

In the short term, consumers should not feel much of a pinch, Sand said. But if the conflict lasts for a month, some goods will be delayed, “and of course, the price tag on those goods also goes up.”

The war also means that the Red Sea, mostly closed in 2025 due to Houthi attacks, will likely stay closed throughout 2026, Sand said. It was expected to reopen, which could have lowered consumer prices.

Oil and oil byproducts from the Gulf are also used directly in consumer goods, like plastics, pharmaceuticals and fertilisers. Shortages now may mean higher prices later.

Fertilisers from the Gulf, for example, are needed soon for spring planting. Delays could affect crops next year.

A shortage of helium from the Gulf could also impact semiconductor manufacturing, delaying car manufacturing and other industries, Ziemba said.

The spectre of 1970’s-style ‘stagflation’

Higher consumer prices could increase the risk of “stagflation”, when stagnant economic growth occurs alongside high unemployment and high inflation.

That is how the US economy responded to the oil price shocks of the 1970s.

Severin Borenstein, faculty director of the Energy Institute at the University of California, Berkeley’s Haas School of Business, said, “There’s certainly concern about stagflation again.”

That combination of high inflation plus high unemployment, Borenstein said, “is just really tough for the Fed to deal with”.

“They can either juice the economy or slow it down, and the two problems call for opposite solutions”, Borenstein said.

The Fed can lower interest rates to prompt spending and hiring, which can make inflation worse, or it can raise interest rates to lower inflation, which can slow hiring.

Ziemba said higher oil prices likely point to “inflation remaining stickier, which means it’s harder for the Fed to cut interest rates.”

As a result, “mortgage rates and other long-term interest rates might be stuck at their current levels,” Ziemba said. Mortgage rates, which were at 5.99 percent on February 27, are up to 6.29 percent as of March 12.

Even if the war ends tomorrow, it may already be accelerating longer-term shifts.

Rogowsky called US attacks on Iran “an injection of adrenaline” into a realignment already under way, as middle powers seek to reduce their reliance on the US.

That realignment “will affect our terms of trade, which will have a distinct impact on our economy”, Rogowsky said.

Logistics consultant David Coffey said for some businesses, the war is expediting conversations about risk. “They may have been assuming ‘Yes, there’s risk in the Middle East,’ but they may not have been assuming that this would kick off”, Coffee said.

Making supply chains more secure could raise costs for consumers, he said.

Military spending and the US budget

Meanwhile, Heidi Peltier, a senior researcher at Brown University’s Costs of War Project, said war also means long-term expenses around debt payments and veterans’ healthcare.

“We have spent at least $1 trillion in interest on the Iraq and Afghanistan wars – and rising, because it’s not like we’ve paid off any of that principal”, Peltier said.

Military spending, she said, also tends to create fewer jobs than government investment in education or healthcare. “If we’re spending money on this, what are we not spending money on?” Peltier asked.

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.

Iranian explosive-laden boats appear to have attacked two fuel tankers in Iraqi waters, setting them ablaze and killing one crew member, after projectiles struck three vessels in Gulf waters, according to reports.

The ships targeted in late-night ⁠attacks on Wednesday in the Gulf near Iraq were the Marshall Islands-flagged Safesea Vishnu and the Zefyros, which had loaded fuel cargoes in Iraq, two Iraqi port officials told the Reuters news agency.

“We recovered the body of a foreign crew member from the water,” one port security official said, as Iraqi rescue teams continued searching for other missing seafarers. It was not immediately clear which ship that person was linked to.

One Iraqi port security source said Zefyros is flagged ‌in Malta and provided Reuters with a list of crew names.

Al Jazeera’s correspondent in Baghdad, Iraq, Mahmoud Abdelwahed, said the tankers were loaded with crude oil from the Umm Qasr port in southern Iraq in the Basra province, and were attacked soon after their voyage got under way.

“Iraqi officials say this is a flagrant violation of Iraq’s sovereignty given the fact this act, they say, of sabotage has happened in Iraq’s territorial waters,” Abdelwahed said.

Reuters said that reports of the use of explosive-laden unmanned surface vessels, which Ukraine has used with great effect in its war with Russia, come as Iran has blocked oil shipments from transiting the key Strait of Hormuz, through which one-fifth of ⁠the world’s oil transits but has been blocked amid the United States-Israeli war on Iran.

Reuters, citing two unnamed sources, also reported on Wednesday that Iran ‌has deployed about a dozen mines in the strait, while US President Donald Trump said US forces had struck 28 Iranian mine-laying vessels, amid warnings by Trump of severe repercussions should Iran lay mines in the key waterway for global shipping.

Strait of Hormuz sealed

Iran’s Islamic Revolutionary Guard Corps (IRGC) have warned that any ship passing through the Strait of Hormuz will be targeted.

The Thai-flagged Mayuree Naree dry bulk vessel was struck by “two projectiles of unknown origin” while sailing through the strait earlier on Wednesday, causing a fire and damaging the engine room, the ship’s Thai-listed operator Precious Shipping said in a statement.

“Three crew members are ⁠reported missing and believed to be trapped in the engine room,” Precious Shipping said.

“The company is working with the relevant authorities to rescue these three ⁠missing crew members,” it said, adding that the remaining 20 crew members had been safely evacuated and were ashore in Oman.

Images shared by Thai news outlet Khaosod English showed what were reported to be crew members of the ship after their rescue by Oman’s navy.

The IRGC said in a statement carried by the semi-official Tasnim news agency that the ship was “fired upon by Iranian fighters”, suggesting the first direct engagement by the IRGC, who have previously fired missiles or drones.

The Japan-flagged container ship ONE Majesty also sustained minor damage on Wednesday from an unknown projectile 25 nautical miles (about 46 kilometres) northwest ⁠of Ras al-Khaimah in the United Arab Emirates, two maritime security firms said. Its Japanese owner Mitsui OSK Lines and a spokesperson for Ocean Network Express, its charterer, said the vessel was struck while at anchor in the Gulf, and an inspection of the hull revealed minor damage above the waterline.

All crew are safe, they said, adding that the vessel remains fully operational and seaworthy. The owner said the cause of the incident remained unclear and was under investigation.

A third vessel, a bulk ‌carrier, was also hit by an unknown projectile approximately 50 nautical miles (about 93km) northwest of Dubai, maritime security firms said.

The projectile had damaged the hull of the Marshall Islands-flagged Star Gwyneth, maritime risk management company Vanguard said, adding that the vessel’s crew were safe. Owner Star Bulk Carriers said the ship was hit in the hold area while it was anchored. There were no crew injuries and no listing.

The US Navy has refused near-daily requests from the shipping industry ⁠for military escorts through the Strait of Hormuz since the start of the war on Iran, saying the risk of attacks is too high for now, sources familiar with the matter told Reuters.

Two foreign tankers were seen ablaze in Iraqi territorial waters after a strike near the al-Faw port. Authorities say they evacuated 25 crew members but have confirmed at least one death and are battling to control the flames.

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.

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

The World Health Organization has warned that “black rain” caused by Israeli strikes on Iran’s oil facilities could pose health risks, especially for children. Iranian authorities have advised residents stay indoors as fires and thick smoke worsen air quality.

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.

The United States and Israel’s war on Iran has caused the largest energy supply shock in decades.

The Strait of Hormuz is in effect closed, and attacks are being carried out on energy facilities in the Middle East, rattling oil markets.

From Americans filling their tanks at the pump to European factories and Asian economies, the impact is already being felt.

US President Donald Trump says the rise in oil prices is a “very small price to pay” for “safety and peace”. But investors warn that if the conflict drags on, there’s danger of stagflation.

The US president repeats claims that Cuba is ready to negotiate as it faces a spiralling energy and economic crisis.

United States President Donald Trump has signalled that his administration is still pursuing a government overthrow in Cuba even as the US-Israeli war on Iran enters its second week.

Trump said on Monday that the US Department of State is still focused on Cuba, where plans by the White House may or may not include “a friendly takeover” of the island, according to the Reuters news agency.

US Secretary of State Marco Rubio is “dealing” with Cuba, the president told reporters in Florida.

“He’s dealing [with it], and it may be a friendly takeover, it may not be a friendly takeover. Wouldn’t really matter because they’re really down to … as they say, fumes. They have no energy, they have no money,” Trump said.

“They are going to make either a deal or we’ll do it just as easy, anyway,” he said.

Cuba has been grappling with an energy crisis since January, when US forces abducted Venezuelan President Nicolas Maduro and halted fuel exports from Caracas to Havana, cutting the country off from one of its few allies and a key source of oil for the Cuban economy.

White House officials have suggested that Cuba is facing an economic collapse and that its government is ready to negotiate with Washington.

Trump has said on multiple occasions that Cuba’s government is ready to “fall” and that its leaders want to “make a deal” with Washington, according to NBC News.

Cuba has denied reports of high-level talks, according to Reuters, but it has not “outright” denied US media reports of “informal talks” between Raul Guillermo Rodriguez Castro, the grandson of former Cuban President Raul Castro, and US officials.

Cuba has been in the crosshairs of the US for decades, but Trump is the first US president since the Cold War to openly discuss and pursue a government change in Havana.

Trump’s attacks on Venezuela and Cuba are in line with his revival of the “Monroe Doctrine”, a 19th-century policy that states the Western Hemisphere should be solely under the sway of the US and no other foreign power.

Trump first raised the notion of a “friendly takeover” of Cuba in February.

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.