The world’s energy system is under unprecedented strain as the Middle East conflict enters its fourth week with no resolution in sight and oil prices hovering near $100 a barrel. The combination of a closed Strait of Hormuz, shuttered oil ports, evacuated export terminals, and targeted fuel storage facilities has created a supply shock that emergency reserve releases can partially but not fully address. Markets are reflecting a growing recognition that this crisis may define the global economic landscape for months to come.
Iran struck merchant ships, fuel tanks, oil tankers, and export port infrastructure across Bahrain, Iraq, Oman, and the Strait of Hormuz on Thursday. The Thai-registered Mayuree Naree was hit near the strait, with three crew members reported trapped. Iraq shut all oil export ports. Bahrain placed residents under shelter-in-place orders. Oman cleared its Mina Al Fahal terminal.
Brent crude gained 9% Thursday to briefly touch $100.29 before settling at around $98. West Texas Intermediate rose 8.6% to $94.75. Oil has climbed from $60 at the year’s start to a peak of $119 this week. Saudi Aramco has warned of catastrophic consequences for world markets if the strait blockade continues. Iran’s military warned of $200-per-barrel oil.
The IEA released 400 million barrels of emergency crude from 32 member nations. The US contributed 172 million barrels from its Strategic Petroleum Reserve, beginning deliveries within a week. President Trump pledged to “finish the job” against Iran and said prices would fall as the campaign concludes. Energy Secretary Chris Wright accused Iran of deliberately threatening global energy security.
Goldman Sachs raised its Q4 2026 Brent forecast to $71 per barrel from $66. Deutsche Bank’s Jim Reid warned of a broader stagflationary shock. Japan’s Nikkei fell 1.6%, South Korea’s Kospi lost 1.2%, and European natural gas gained 7.7% for a second consecutive day. The world is watching and waiting.
