Strikes on oil and gas infrastructure in the Middle East, part of a regional escalation between Israel, the United States and Iran, go beyond military confrontation and are beginning to directly threaten global energy security. The strategically vital Strait of Hormuz is of particular concern: about 20% of the world’s oil and one-fifth of liquefied natural gas (LNG) trade pass through it. Any disruption to shipping in this area could trigger a large-scale shock to the world economy.
Experts warn of catastrophic consequences from a possible closure of the strait. Goldman Sachs estimates that a one-month interruption of shipments through Hormuz could drive gas prices in Europe and Asia up by 130%, while the oil price could rise by $15 per barrel. Some analysts, such as Mamdouh Salama, believe that with a prolonged closure oil prices could reach $120 per barrel, inflicting huge losses on global economic growth.
The situation is compounded by simultaneous threats to key production and processing facilities, such as sites in Qatar and Saudi Arabia. After an attack on its facilities, Qatari company QatarEnergy announced a suspension of LNG production and related products. Because Qatar accounts for about 20% of the global LNG market and 82% of its exports go to Asia, any disruption immediately affects prices in Asia and then in Europe through the interconnected LNG market.
The oil market is also under pressure: in regions such as Iraqi Kurdistan, companies are preemptively halting production. This intertwining of disruptions in gas and oil creates a real risk of a “double shock” for energy markets. In addition, tanker insurance premiums have doubled, and the withdrawal of several insurers from the market effectively reduces available coverage, raising risk-related price surcharges.
Europe appears most vulnerable on the gas front: after Qatar’s announcement, prices there rose by 50%. Although gas stocks may be sufficient for several weeks, the shock quickly passes through to consumers and businesses via higher costs for transport, industry and food. A sustained rise in oil prices to $90–100 per barrel could raise inflation in developed economies by roughly 0.8 percentage points, forcing central banks to choose between supporting growth and containing prices. The United States is less vulnerable as a major producer of shale oil and gas, but price spikes still affect domestic fuel prices and increase political pressure.
The attacks on infrastructure also have a political calculus behind them, demonstrating Iran’s willingness to escalate and using the Strait of Hormuz as its “most powerful weapon” to inflict a global economic blow. While a long-term closure of the strait seems unlikely to many, even temporary disruptions can alter global energy flows, prompting importing countries to accelerate diversification of sources and investment in alternative energy. These changes will affect pricing, long-term contracts and the map of global energy security.
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What control does Iran exercise over the Strait of Hormuz in practice, and how does this affect international shipping in peacetime? - Iran exerts de facto control over the Strait of Hormuz through geographic dominance (the strait lies between the Iranian coast and the territorial waters of Oman), deployment of coastal missile batteries and air defense systems, constant patrols by vessels of the Islamic Revolutionary Guard Corps (IRGC), and regular military exercises. In peacetime this creates an atmosphere of coercion, where international shipping (especially tankers) operates under a constant threat of possible strait closure. Insurance for ships passing through the strait becomes more expensive, and routes may be adjusted during periods of heightened tension, although physical blocking does not occur.
Why are companies in Iraqi Kurdistan particularly vulnerable to preemptive production stoppages during regional escalation? - Companies in Iraqi Kurdistan are vulnerable because the region is semi-autonomous and depends on oil exports via pipelines that cross territories controlled by other actors (including Iraq, where Iran exerts influence, and Turkey). In an escalation between, for example, Iran and the U.S. or Israel, Iran can pressure the central Iraqi government or use its proxy forces to disrupt pipeline operations to demonstrate its capabilities and inflict economic damage without direct attack. Kurdistan has no independent access to the sea, making its logistics highly sensitive to regional instability.
What proxy forces or methods does Iran traditionally use to threaten shipping in the Strait of Hormuz without resorting to direct attacks by its navy? - Iran traditionally employs “hybrid” or asymmetric warfare methods: 1) Fast IRGC boats that can simulate attacks or dangerously approach commercial vessels, disrupting their course. 2) Naval mines that can be covertly laid in the strait’s waters. 3) Cyberattacks on port management systems or shipping companies. 4) Coordination with Yemeni Houthis (Iran’s allies) for attacks on ships in the Red Sea, which indirectly pressures logistics linked to the Strait of Hormuz. 5) Seizure of foreign tankers under various pretexts by IRGC forces. These methods allow Iran to create a threat while retaining the ability to deny direct responsibility.
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