The global energy crunch stemming from the conflict in Iran is getting more severe by the day, and regardless of how long the interruption to global supply lasts, this crisis is one for the record books.
The U.S. and Israel’s sweeping military campaign in Iran now involves a dozen other nations in the Middle and Near East, many of which are also oil and gas producers. By shutting down the Strait of Hormuz that links the Persian Gulf to global markets, the war has effectively erased the 20 million barrels of petroleum that used to traverse the waterway each day, according to a report released Thursday by the International Energy Agency.
Now, only “a trickle” is passing through, the IEA said, and the implications for global oil markets are historic.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the agency wrote in its report.
And the chaos isn’t just in trade, the IEA warned. Iranian attacks have targeted crucial energy infrastructure in the Gulf, and countries have been forced to slash production, a market distortion that could ripple long after tankers can safely cross the Strait of Hormuz again.
