Shipping halt forces markets to price deeper disruption
Energy traders are reassessing supply security as the U.S. war with Iran spreads across the Middle East without a clear route toward de escalation. The shift has pushed markets toward worst case planning, with the biggest immediate concern centered on the flow of crude and fuel exports out of the Gulf. A prolonged interruption could tighten inventories, pressure inflation, and weigh on growth if higher energy costs persist.
Tanker traffic through the Strait of Hormuz has effectively stopped as ship owners take precautionary steps. The waterway is the most critical global chokepoint for oil shipments. Energy consultancy Kpler estimated that about one third of total seaborne oil exports moved through the Strait in 2025. A sustained slowdown there can turn a regional conflict into a global supply event because so many export routes converge on that corridor.
The conflict has also expanded its reach beyond maritime risk. Iran has broadened retaliatory strikes to include regional energy facilities, raising the chance that the disruption will be felt at production and processing sites, not only along shipping routes. That combination has heightened uncertainty for refiners and traders trying to manage cargo timing, insurance costs, and alternative routing decisions.
Qatar LNG shutdown adds pressure to European gas prices
The strain is not limited to oil. On Monday, Qatar shut down liquefied natural gas production after two drones struck key facilities. The Gulf provides around 20% of global LNG exports, largely from Qatar, and those shipments typically pass through the same Strait. That link means a shipping shock can quickly tighten both crude markets and gas markets, particularly in Europe where LNG is a major marginal supply source.
Prices moved sharply as trading reopened. Crude oil rose more than 5% on Monday after being up more than 12% earlier in the session. European natural gas futures jumped more than 40%. The moves reflected concerns that a disruption lasting more than a few days could reshape near term balances and force buyers to compete for replacement cargoes and higher cost supply.
Natasha Kaneva, head of global commodities research at JPMorgan, told clients on Sunday that an earlier assumption that an unprecedented disruption would remain unlikely had failed. She said the war has already produced the first near total halt to Strait shipping in modern history, a development that, if sustained, would test global spare capacity and emergency response planning.
Price scenarios range from 100 dollars to 200 dollars
Strategists laid out a wide set of outcomes based on duration and escalation. Francisco Blanch, a commodity strategist at Bank of America, said Brent could rise above $100 per barrel and European gas could break 60 euros per megawatt hour if Tehran takes a hard line and attacks neighboring energy facilities. He also said that a prolonged Strait disruption could add $40 to $80 per barrel to Brent, implying a move that would reverberate across transport costs, petrochemicals, and consumer inflation measures.
Kaneva said a war lasting more than three weeks could exhaust Gulf storage capacity as barrels back up with limited export routes. Under that scenario, producers would face operational constraints that could force production shut ins. She said Brent could reach $120 per barrel if storage fills and output must be curtailed.
On Monday, Michael Hsueh, a research analyst at Deutsche Bank, told clients that Brent could surge toward $200 per barrel if Iran succeeded in enforcing a full closure of the Strait through the deployment of mines, anti ship missiles, and other weapons. That path represents an extreme tail risk because it would cut off a central artery of global oil logistics rather than merely reducing supply at the margin.
Political signals added another layer of uncertainty. Trump said on Monday that the war may last up to five weeks and would continue as long as necessary to achieve U.S. objectives. Earlier, the White House said Iran ignored U.S. warnings to abandon efforts to rebuild its nuclear program after a U.S. strike last year and said Tehran was developing a ballistic missile program intended to shield nuclear weapon development.
Fuel costs rise quickly while political risk compounds supply fears
For households and businesses, the most immediate impact is expected at the pump. Patrick De Haan, head of petroleum analysis at GasBuddy, said U.S. gasoline prices will likely start rising today or tomorrow. He said motorists should expect an average increase of 10 to 30 cents per gallon over the next week, a move that can feed into delivery costs and consumer spending patterns.
Markets are also using recent history as a reference point for how quickly crude rallies can translate into fuel inflation. The last time oil reached $100 per barrel was after Russia invaded Ukraine in February 2022. U.S. gasoline later reached a national average record of $5.016 per gallon by June, according to AAA.
Beyond the Strait, analysts warned that domestic instability in Iran could create additional supply threats. Kaneva said a collapse of the governing system would place Iran output at risk, with more than 3 million barrels per day potentially exposed. She also said oil prices often spike by more than 70% when regime change occurs in major crude producing countries. She described a key risk as institutional breakdown and the possibility of internal conflict amid polarization and ethnic tensions.
There is also a lower price path if the conflict ends quickly. Blanch said crude could fall back into a $60 to $70 per barrel range if hostilities conclude within days under newly appointed leadership, leaving only mild disruption. However, statements from Iran pointed to limited near term flexibility. Iran’s security chief Ali Larijani rejected negotiations with the U.S. and said Iran would not negotiate, arguing that the joint U.S. Israeli attack had dragged the region into an unnecessary war.
