US-Israel Tensions with Iran Threaten Global Energy Markets with Soaring Fuel Prices

Tehran. Rising tensions between the United States and Israel with Iran appear set to push consumers and businesses worldwide into the grip of soaring fuel prices. Even if this conflict, which has been ongoing for a week, ends soon, analysis suggests it could take weeks or months for fuel prices to return to normal due to damaged infrastructure, disrupted supply chains, and shipping risks. This poses a serious threat to the global economy and has become a political headache for US President Donald Trump, who is on the verge of midterm elections.

According to analysts at JP Morgan, the market has moved beyond mere geopolitical risk concerns and entered a phase of actual operational disruption. Following Iran's targeting of vessels in the crucial Strait of Hormuz, located between Oman and its coasts, and attacks on regional energy infrastructure, nearly 20% of the world's crude oil and natural gas supply has been halted. Since the war began, oil prices in the global market have increased by more than 25%, driving up costs for everything from household kitchens to vehicles.

If the Strait of Hormuz is completely closed, major producers like Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait are forced to halt the shipment of approximately 140 million barrels of oil. This volume equals 1.4 days of total global demand. Due to the lack of shipment, storage centers in the Middle East are full, and Iraq and Kuwait have begun cutting oil production. Experts note that once oil fields are shut down, returning them to their former state is a very difficult and time-consuming process.

Qatar has declared an uncontrollable situation regarding its gas exports due to Iranian drone attacks. It is estimated that it will take at least a month for Qatar, which supplies 20% of the world's LNG, to return to normal. Similarly, Saudi Aramco's massive Ras Tanura refinery and export terminal have been shut down due to the attacks. 

Although the White House defended the attack, stating that Iran could pose an immediate threat to the US, the sharp rise in fuel prices has put pressure on the Trump administration. The average retail price of gasoline in the United States has reached $3.32 per gallon, 34 cents higher than last week.

The impact of this crisis is even more pronounced in Asian countries, which import 60% of their crude oil from the Middle East. Countries such as India, China, Thailand, and Vietnam have imposed bans on fuel exports due to oil shortages. On the other hand, Russia has benefited from this situation. 

The price of Russian crude oil has increased after the US gave Indian refineries a 30-day exemption to buy Russian oil as an alternative to the Middle East. This crisis has proven to be a double blow for Europe, as it was already grappling with a gas crisis following Russia's invasion of Ukraine in 2022.