Oil remains under pressure due to war and export uncertainty
The global oil market has entered a new phase of heightened instability in which prices are no longer determined only by the usual relationship between supply and demand, but above all by the security of navigation and the ability of producers to physically deliver energy commodities to customers. Fear of supply disruptions from the Persian Gulf has once again become a central theme for financial markets, energy companies and industrial consumers, and every new signal about attacks on infrastructure, restricted tanker traffic or higher insurance costs is immediately reflected in crude oil, refined products and transport prices. Such a reaction is not surprising because this is an area through which one of the largest shares of the world’s oil trade passes, so even a short-term disruption there can have consequences far beyond the region.
The latest data confirm that the market is reacting not only to geopolitical uncertainty, but to real logistical difficulties. In March, the International Energy Agency warned that the war in the Middle East is creating the largest supply disruption in the history of the global oil market. According to that assessment, flows of crude oil and petroleum products through the Strait of Hormuz have fallen from approximately 20 million barrels per day before the start of the war to only a small fraction of those volumes, while Persian Gulf countries have had to reduce production by at least 10 million barrels per day due to the export stoppage. The market is therefore no longer watching only political messages and diplomatic announcements, but also operational reality: how many tankers are actually passing through, how much storage capacity remains available and how long producers will be able to hold back oil before they are forced to cut production further.
The Strait of Hormuz as a global point of vulnerability
The Strait of Hormuz has for decades been regarded as one of the most important energy corridors in the world, but the current crisis shows how great that dependence still is despite attempts at diversification. The U.S. Energy Information Administration states that in the first half of 2025 an average of 20.9 million barrels of oil per day passed through that strait, which corresponds to roughly one-fifth of global consumption of liquid fuels and one-quarter of total seaborne oil trade. In addition, more than one-fifth of the world’s trade in liquefied natural gas also passes through the same passage, primarily from Qatar to Asian markets. This means that the problem is not limited only to gasoline, diesel and the petrochemical industry, but also affects power systems, heating and industrial production costs in importing economies.
An additional problem is that alternative routes cannot replace the full capacity of the Strait of Hormuz in the short term. The EIA estimates that pipelines in Saudi Arabia, the United Arab Emirates and Iran can bypass only part of the volume that is otherwise exported by sea. In other words, even when producers try to redirect part of the flow to land routes, a large share of oil remains that cannot be delivered normally without safe navigation. That is precisely why the market reacts nervously even to news that does not formally mean the complete closure of the passage. It is enough for insurers to raise premiums, for shipowners to postpone loading or for crews to judge the route too dangerous for the effect on prices to appear almost instantly.
Not only barrels are decisive, but also shipowners’ willingness to sail
In the current phase of the crisis, the key difference compared with some earlier disruptions is the fact that the problem is not exclusively physical damage to production fields or terminals. Much of the tension stems from the fact that shipowners, insurers and trading houses must assess the risk of passing through an area where there is a threat of attacks, navigation interference and strikes on civilian vessels. For that reason, the International Maritime Organization convened an extraordinary session of its Council for March 18 and 19 dedicated to the effects of the situation in the Arabian Sea, the Gulf of Oman and the area of the Persian Gulf, especially around the Strait of Hormuz. The organization also warned that around 20,000 seafarers have been affected and that a fatality and injuries to crew members on merchant ships have also been recorded.
That humanitarian dimension directly turns into an economic problem. When crew safety becomes questionable, freedom of navigation ceases to be merely a legal principle and becomes a concrete cost. Ships require war-risk insurance, crews require additional compensation, and cargo has to be rerouted, delayed or sent on more expensive and longer routes. UNCTAD warns that such disruptions raise not only the price of oil itself, but also freight rates, marine fuel prices and insurance premiums. That is why the world is watching not only the movement of Brent and WTI futures contracts, but also transport prices, which later feed into the price of almost every good, from fuel to food.
Prices are rising, but they still depend on the duration of the crisis
The rise in oil prices in recent weeks shows how sensitive the market is to every new development. The EIA states that the Brent spot price rose from an average of 71 dollars per barrel on February 27 to 94 dollars on March 9, immediately after the start of the military escalation on February 28. The International Energy Agency then announced that during the most tense moments of trading, prices came close to 120 dollars per barrel, before later falling back toward 92 dollars, but still remaining around 20 dollars above the level at the start of the month. Such dynamics show that the market is pricing in not only the current shortage of physical supply, but also a premium for uncertainty, that is, the cost of the possibility that the situation could deteriorate further.
At the same time, in its short-term forecast, the EIA tries to maintain a somewhat calmer tone and assumes that part of the disruption could be temporary. According to that assessment, Brent could average around 91 dollars per barrel in the second quarter of 2026 if navigation gradually normalizes and if shut-in production begins to return to the market. But the same institution warns that the main risk is prolonged avoidance of passage through the Strait of Hormuz. If such a situation drags on, storage facilities behind the bottleneck could quickly fill up, and producers would have to reduce production further, which would again intensify pressure on prices.
The market no longer fears only crude oil
In public discussion, people often speak primarily about the price per barrel, but the current disruption is also spreading to other markets closely connected with energy. The IEA emphasizes that exports of refined products and liquefied petroleum gas from the Gulf have almost come to a halt, while more than 3 million barrels per day of refining capacity in the region have already been shut down due to attacks and the inability to export. This means that not only the supply of crude oil is narrowing, but also that of finished products necessary for transport, aviation, heating and industry. In practice, this increases the risk that some markets will experience shortages or sharper price increases even if some crude oil is successfully redirected through alternative channels.
UNCTAD further warns that around one-third of the world’s seaborne trade in fertilizers, approximately 16 million tonnes, also passes through the Strait of Hormuz. The consequence could be higher prices for agricultural inputs, especially in countries that already have limited fiscal space and depend heavily on imports of food, energy and fertilizers. When energy becomes more expensive, transport and production become more expensive, and when gas and fertilizers become more expensive, pressure on food prices also rises. That is why this story is not only a matter for the energy sector, but also a broader cost wave that can hit households, farmers and the processing industry.
OPEC+ entered the crisis with a plan to increase production
One of the paradoxes of the current situation is that the market entered the war with relatively different expectations. On March 1, OPEC+ announced that eight participating countries would continue with the gradual unwinding of part of the voluntary production cuts and that in April they would implement an adjustment of 206 thousand barrels per day. The message was that market fundamentals were healthy and that low inventories justified a cautious return of part of the volumes. In other words, immediately before logistical and security disruptions became the dominant theme, producers were signaling a controlled increase in supply and a relatively stable view of the market.
That is precisely why the current shock appears even stronger. Instead of a discussion about whether the market would be in a mild surplus or in balance in the second half of the year, the focus has shifted to whether physical oil can reach the buyer at all. In its monthly report for March, OPEC still maintains its estimate that global oil demand in 2026 will grow by a solid 1.4 million barrels per day, showing that the organization still counts on relatively strong consumption, especially outside the OECD. But war-related disruptions have now overshadowed the standard discussion about supply and demand fundamentals, because in the short term the market is more concerned with corridor throughput than with long-term balances.
The IEA and consumer countries are trying to mitigate the shock
In order to limit the blow to the market, members of the International Energy Agency unanimously decided on March 11 to make 400 million barrels available from emergency reserves. This is the largest coordinated stock release in the IEA’s history. The decision itself is important for two reasons. The first is psychological: a signal is sent to the market that the largest consuming countries will not passively watch rising prices and supply disruptions. The second is practical: additional barrels from reserves can ease short-term shortages and give buyers time until it becomes clear whether navigation will normalize or whether the disruption will persist.
But even such a move cannot completely remove the problem. Strategic reserves can help in a transitional period, but they cannot permanently replace regular exports from a region that remains crucial to the world market. In addition, if the bottleneck lies in tanker traffic, part of the reserves can stabilize prices and availability in consuming countries, but cannot solve the fact that producers in the Gulf cannot export their own oil without hindrance. Therefore, the effectiveness of this measure will depend on the duration of the crisis and the speed with which minimally safe navigation can be restored.
Asia is the most exposed, but the consequences are global
Although at first glance it seems that the countries most affected are those directly linked to the Persian Gulf, the data show that the circle of exposed countries is much wider. According to the EIA, as much as 89 percent of the crude oil and condensate that passed through the Strait of Hormuz in the first half of 2025 went to Asian markets, with China, India, Japan and South Korea together accounting for almost three-quarters of those flows. This means that prolonged delays or drastically higher transport prices would first hit Asian importers, their refineries and industrial chains, and then spill over to the rest of the world through higher goods prices and weaker growth.
But the effect is not limited to oil importers. If transport, insurance and marine fuel costs rise, a wide range of goods that have no direct connection with the energy sector becomes more expensive. UNCTAD therefore warns that developing countries are particularly vulnerable because they already face high borrowing costs, limited budgetary space and pronounced dependence on imports of basic products. In such an environment, even a relatively short shock can cause a noticeable increase in the cost of living, pressure on fuel or food subsidies and a deterioration in trade balances.
How long oil can remain under pressure
For now, the answer to that question depends less on classic market models than on the security situation at sea and the political development of the conflict. If transit through the Strait of Hormuz recovers at least partially, part of today’s risk premium could gradually deflate, and prices could return closer to levels that reflect the fundamental relationship between global supply and demand. In their analyses, the IEA and the EIA still assume that during 2026 total global supply, with growth outside OPEC+, could in the long term be sufficient if the extraordinary disruption does not turn into a permanent condition.
If, however, attacks continue, if shipowners continue to avoid the passage, or if new strikes on energy infrastructure occur, the market will remain under pressure and enter a phase in which not only oil becomes more expensive, but also an entire range of costs linked to its movement from the wellhead to the final consumer. In that scenario, energy would remain the main driver of daily nervousness in financial markets, and the consequences would be felt far beyond Gulf ports: at gas stations, in production costs, food prices and economic growth estimates. That is precisely why oil remains under pressure from war and export uncertainty, and the global economy is once again reminding itself how inseparable navigational security and energy availability are.
Sources:- International Energy Agency (IEA) – March oil market report with an assessment of the largest supply disruption in the history of the market, price movements and production cuts (link)- International Energy Agency (IEA) – decision by member countries to release 400 million barrels from emergency reserves in order to mitigate supply disruptions (link)- U.S. Energy Information Administration (EIA) – short-term overview of the global oil market with an assessment of Brent and the risk of a prolonged disruption of passage through the Strait of Hormuz (link)- U.S. Energy Information Administration (EIA) – analysis of global oil chokepoints with data on the volume of oil and LNG passing through the Strait of Hormuz and the limitations of alternative routes (link)- International Maritime Organization (IMO) – overview of the security situation for navigation, seafarers and merchant vessels in the area of the Strait of Hormuz (link)- International Maritime Organization (IMO) – statement by the Secretary-General on attacks on civilian shipping and a call to respect freedom of navigation (link)- UN Trade and Development (UNCTAD) – assessment of the consequences of disruptions in the Strait of Hormuz for trade, freight rates, fertilizers and vulnerable economies (link)- Organization of the Petroleum Exporting Countries (OPEC) – decision by eight OPEC+ members on the gradual return of part of production and emphasis on market stability (link)- OPEC Monthly Oil Market Report – estimate of global oil demand growth in 2026 by 1.4 million barrels per day (link)
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