LONDON/NEW YORK: The global oil market is facing severe disruption following tensions around the Strait of Hormuz, raising fears that crude prices could climb as high as $200 per barrel.
The ongoing crisis, now entering its second month, has triggered sharp price increases, lowered global growth forecasts, and raised concerns about fuel shortages in several regions, including parts of Asia and countries like Pakistan.
According to Bloomberg, the severity of the situation may still be underestimated. U.S. officials and Wall Street analysts are increasingly warning that oil prices could spike to unprecedented levels, posing a serious threat to the global economy.
Experts have drawn comparisons to the oil shocks of the 1970s, cautioning that any prolonged disruption in the Strait of Hormuz could trigger a major global energy crisis.
Shortages initially seen in Asia may spread to Western markets, with Europe potentially facing diesel supply issues in the coming weeks.
Supply Disruptions and Emergency Measures
The closure of the vital shipping lane has created a supply gap of approximately 11.1 million barrels per day, although Saudi Arabia and the United Arab Emirates have attempted to offset this through alternative routes, covering nearly 10.9 million barrels daily.
Global oil supply, which averaged 106.9 million barrels per day in early 2026, has seen a significant shortfall due to the disruption. Emergency measures have included:
Saudi Arabia redirecting 7.3 million barrels per day via pipelines
The International Energy Agency releasing 2 million barrels per day from reserves
Additional measures covering 3.7 million barrels per day
Despite these efforts, the supply-demand imbalance remains a major concern.
Warnings from Industry Leaders
Patrick Pouyanné, chief executive of TotalEnergies, warned that if the crisis continues for more than three to four months, it could have severe global consequences. He highlighted that nearly 20% of global crude oil and LNG supply could be impacted.
The daily supply gap caused by disruptions in the Strait of Hormuz alone exceeds the combined oil consumption of major European economies such as the United Kingdom, France, Germany, Spain, and Italy.
Rising Prices and Global Impact
Currently, oil prices are hovering around $112 per barrel, up nearly 55% since the conflict began, though still below the 2008 peak of $147.50. However, analysts warn that continued instability could push prices significantly higher.
Natural gas prices in Europe have already surged by around 70%, while demand in Asia has declined by approximately 2 million barrels per day, particularly in the petrochemical sector. Meanwhile, shortages of petrol, diesel, and jet fuel are becoming more pronounced.
Governments, including the United States and others, have announced record releases from strategic reserves to stabilize markets. Iran has also allowed limited passage of foreign vessels through the Strait of Hormuz, though analysts say such measures have had only a modest impact.
Growing Concerns Worldwide
The crisis is beginning to affect daily life in some countries. In Pakistan, for instance, citizens have been encouraged to conserve fuel, even being advised to watch sporting events from home. Meanwhile, Europe is bracing for possible diesel shortages in the coming weeks.
Analysts warn that unless tensions ease soon, the world could be heading toward one of the most severe energy crises in modern history.
