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Agadir – The ongoing war in the Middle East, which erupted on February 28 with the initial US-Israeli strikes on Iran, is resulting in shockwaves through global energy markets, the International Energy Agency (IEA) reports.
The agency warned that oil exports through the strategic Strait of Hormuz have dropped to less than 10% of pre-conflict levels, forcing producers across the Gulf to reduce output drastically.
Since the start of the conflict, IEA pointed out that markets have reacted sharply.
Brent crude futures rose 35% by March 9, while European natural gas benchmarks jumped 75%, with diesel and jet fuel markets particularly affected.
Although the global oil market was in surplus throughout 2025, prolonged supply disruptions could push it into a deficit.
Regional storage tanks, holding more than 8.2 billion barrels last year, provide some cushion, along with 1.2 billion barrels of public emergency oil stocks and an additional 600 million barrels of industry stock held under government obligations.
However, the IEA notes that unless exports resume, “further curtailments of production may become necessary.”
Natural gas markets are also under pressure, still recovering from the 2022 supply shock linked to Russia’s invasion of Ukraine.
The IEA highlighted the risks from Qatar’s Ras Laffan facility, which was shut down following an attack on March 2.
In 2025, Ras Laffan produced 112 billion cubic metres of LNG, along with 300,000 barrels per day of LPG and 180,000 barrels per day of condensate, making it the world’s largest LNG facility.
Strait of Hormuz as global energy chokepoint
The Strait of Hormuz, connecting the Persian Gulf with the Gulf of Oman, is a vital corridor for oil and gas exports from Saudi Arabia, UAE, Kuwait, Qatar, Iraq, Bahrain, and Iran.
IEA further explained that in 2025, roughly 20 million barrels per day of crude oil and oil products, about a quarter of the world’s seaborne oil trade, passed through the Strait, along with over 110 billion cubic metres of LNG.
The IEA notes that alternatives to bypass the Strait are extremely limited. Only Saudi Arabia and the UAE have pipelines capable of rerouting crude, with a capacity of 3.5 to 5.5 million barrels per day. Other Gulf states rely almost entirely on the Strait for exports.
Wider global implications
IEA explained that the disruptions extend beyond energy markets. Fertilizer trade, essential for global food security, is particularly exposed, with over 30% of global urea trade and nearly 20% of ammonia and phosphate shipments moving through the Strait.
The Gulf also produces roughly 8% of global aluminium and handles about half of seaborne sulphur trade, critical for industrial processes and energy technologies.
The IEA concluded analyzing that “prolonged instability could trigger widespread market volatility, affecting oil, gas, and critical commodities globally.”
