Global energy crisis deepens as Hormuz disruption enters fourth week

Tuesday 24 March 2026 - 08:50

By: Dakir Madiha

Global energy crisis deepens as Hormuz disruption enters fourth week

The closure of the Strait of Hormuz has escalated into one of the most severe energy crises in decades, cutting off around 20 percent of global oil supply and sending shockwaves through food and industrial supply chains. As the conflict between the United States and Iran enters its fourth week, the scale of damage and disruption continues to expand across the Middle East.

The International Energy Agency said more than 40 energy facilities across nine countries in the region have been severely damaged since hostilities began on February 28. Speaking in Canberra, IEA Executive Director Fatih Birol described the situation as comparable to the combined impact of the oil shocks of the 1970s and the global gas crisis of 2022. The statement reflects growing concern among policymakers and industry leaders over the durability of the current disruption.

Oil markets have reacted sharply. Crude prices have risen by more than 50 percent since the start of the conflict, with Brent briefly nearing 120 dollars per barrel before easing. European benchmark natural gas prices have almost doubled over the same period, adding further pressure on economies already facing inflation risks.

The damage extends beyond oil. Qatar’s liquefied natural gas sector has been hit heavily. QatarEnergy chief executive Saad al Kaabi told Reuters that Iranian missile strikes destroyed 17 percent of the country’s LNG export capacity at Ras Laffan. The disruption has halted 12.8 million tonnes of annual production for an estimated three to five years, resulting in potential losses of about 20 billion dollars in yearly revenue. Global LNG supply has dropped by nearly 20 percent since QatarEnergy suspended operations on March 2.

The impact is spreading across multiple sectors. Around one third of globally traded fertilizers passes through the Strait of Hormuz. Prices have climbed by roughly 30 percent since late February, according to the Fertilizer Institute. Analysts warn that prolonged disruption will push up food costs and strain agricultural production. US farmers are facing difficult planting decisions as supplies of key inputs such as urea and ammonia from Gulf producers remain blocked. Former US Department of Agriculture chief economist Seth Meyer told Fortune that miscalculations this season could carry significant financial consequences.

Qatar’s helium production, which accounts for about one third of global supply, has also been halted. The shortage is expected to affect semiconductor manufacturing and medical imaging industries, both of which depend on stable helium supplies. Meanwhile, major shipping companies including MSC, Maersk, and Hapag Lloyd have suspended transit through the strait. At least 200 vessels remain stranded in the region, further tightening supply chains.

Diplomatic tensions continue to shape the outlook. President Donald Trump issued a 48 hour ultimatum over the weekend, warning that Iranian power infrastructure could be destroyed if the strait was not reopened. Iran responded by threatening to target energy and water facilities linked to US allies across the Gulf. On Monday, Trump said the United States was engaged in talks with Iran and extended the deadline by five days, though Iranian officials denied that any negotiations were underway.

The crisis remains fluid, with markets reacting to both physical disruptions and political signals. As energy infrastructure damage accumulates and supply routes remain blocked, the global economy faces increasing pressure from a conflict that shows little sign of immediate resolution.