Rising Middle East tensions raise concerns over global oil supply

19:20

Escalating tensions in the Middle East are fueling concerns about potential disruptions to global oil supplies, with analysts warning that crude prices could surge to levels not seen in years if the conflict intensifies.

Iran plays a central role in the global energy landscape. The country ranks among the top oil producers worldwide, pumping roughly 3.1 million barrels per day, according to data from the Organization of the Petroleum Exporting Countries. However, its production remains significantly below the levels recorded in the 1970s, before the 1979 Islamic Revolution and successive rounds of US sanctions reshaped the sector.

Historically, Iran was once the world’s third-largest oil producer, behind the United States and Saudi Arabia. Decades of geopolitical strain, including sanctions policies reinforced under former US President Donald Trump, have constrained exports and limited foreign investment in the country’s energy infrastructure.

Beyond production levels, geography is a critical factor. A substantial portion of the world’s oil shipments passes through the Strait of Hormuz, a narrow maritime corridor bordering Iran. Any disruption to shipping traffic in this strategic chokepoint could quickly ripple across international markets, tightening supply and pushing up prices.

Energy analysts caution that even the perception of risk can trigger volatility. Insurance costs for tankers, freight rates and futures contracts tend to react sharply during periods of instability in the region. If hostilities were to escalate or affect key infrastructure, the impact on global energy markets could be immediate and significant.

Oil-importing nations in Europe and Asia are particularly vulnerable to supply shocks, while major producers may face pressure to increase output to stabilize markets. The coming weeks are likely to test the resilience of global supply chains already strained by geopolitical uncertainty.