The global oil market has been thrown into unprecedented turmoil following the escalation of conflict between the United States, Israel, and Iran, with the International Energy Agency warning that the crisis has triggered what it calls the “largest supply disruption in the history of the global oil market.”
In its latest monthly report released Thursday, the Paris-based agency said the war and its cascading regional effects have severely disrupted oil flows across the Middle East, particularly through the strategically critical Strait of Hormuz — a maritime corridor through which roughly one-fifth of the world’s oil supply normally passes.
The agency said crude shipments and refined petroleum product flows through the narrow channel connecting the Persian Gulf to global markets have plunged dramatically as tanker traffic slowed or halted entirely amid rising security risks and escalating military strikes across the region.
The disruption has triggered violent swings in global oil prices. According to the agency’s report, benchmark Brent crude oil futures have surged sharply in recent weeks, climbing to nearly $120 per barrel as traders react to tightening supplies and the possibility of a prolonged closure of the Strait of Hormuz.
“Oil prices have gyrated wildly since the United States and Israel launched joint airstrikes on Iran on 28 February,” the agency wrote, citing mounting disruptions to Middle Eastern energy infrastructure and maritime trade routes.
Energy analysts say the volatility reflects fears that the conflict could choke off a major portion of the world’s oil exports if the strait remains blocked or if further attacks target regional oil facilities.
The IEA noted that Gulf producers are now cutting output not because of lack of demand but because they are rapidly running out of storage capacity, as export routes become increasingly constrained.
In response to the crisis, the 32 member countries of the International Energy Agency agreed Wednesday to release a massive amount of oil from their strategic emergency reserves.
The collective action will see approximately 400 million barrels of crude released into global markets in an attempt to stabilize supplies and calm prices.
IEA Executive Director Fatih Birol described the move as an extraordinary response to an extraordinary crisis.
“The oil market challenges we are facing are unprecedented in scale,” Birol said. “Therefore I am very glad that IEA member countries have responded with an emergency collective action of unprecedented size.”
The release represents one of the largest coordinated drawdowns of strategic petroleum reserves in modern history, surpassing previous interventions during major geopolitical crises or natural disasters.
The IEA report coincided with renewed price spikes Thursday after Iran’s newly installed supreme leader, Mojtaba Khamenei, vowed that the Strait of Hormuz would remain closed to shipping in response to continued military operations by the United States and Israel.
Iranian authorities argue the closure is a defensive measure intended to prevent foreign military forces from using Gulf waterways to stage attacks.
But the move has profound global consequences.
Each year roughly 20 percent of the world’s oil supply moves through the Strait of Hormuz, including exports from major producers such as Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates.
Any prolonged disruption to this maritime chokepoint threatens to reshape global energy markets and could trigger severe economic consequences worldwide.
The crisis deepened further Thursday when Iraq — home to some of the world’s largest confirmed crude oil reserves — announced the suspension of all oil terminal operations after two tanker vessels were attacked near its coastline.
Authorities in Baghdad said the incidents forced an immediate halt to loading operations at key export facilities as security concerns mounted.
According to reporting by NPR, Iran claimed responsibility for attacking one of the vessels, which Tehran said was owned by the United States.
The incidents mark a dangerous escalation in maritime warfare around the Persian Gulf, where commercial shipping lanes have increasingly become targets in the widening conflict.
Energy security experts warn that attacks on tankers could further paralyze global oil supply chains if shipping companies refuse to send vessels into the region due to rising insurance costs and safety risks.
Meanwhile, the United States and Israel have continued airstrikes against Iranian energy facilities, targeting refineries, pipelines, and storage depots in an effort to cripple Tehran’s oil export capabilities.
Satellite imagery and eyewitness reports have shown massive plumes of black smoke rising from burning facilities across parts of Iran.
Environmental experts say the fires have released enormous quantities of pollutants into the atmosphere, raising fears of long-term health and ecological damage.
The environmental fallout has drawn concern from international organizations, including the World Health Organization.
WHO spokesperson Christian Lindmeier warned earlier this week that toxic fallout from burning oil facilities could pose serious health threats to nearby populations.
“The black rain and the acidic rain coming with it is indeed a danger for the population, respiratory mainly,” Lindmeier told reporters during a briefing in Geneva.
Such contamination can carry hazardous chemicals over large distances, potentially affecting drinking water, agriculture, and air quality for millions of people.
Human rights organizations have also raised alarm about the humanitarian consequences of targeting energy infrastructure in wartime.
Amnesty International warned that attacks on oil facilities risk causing severe civilian harm and environmental disasters.
Heba Morayef, the organization’s regional director for the Middle East and North Africa, said the scale of potential damage raises serious legal concerns.
“The potential for vast, predictable, and devastating civilian harm arising from strikes targeting energy infrastructure — including uncontrolled deadly fires, major disruptions to essential services, environmental damage, and severe long-term health risks for millions — means there is a substantial risk such attacks would violate international humanitarian law,” Morayef said.
She added that in some circumstances such strikes could potentially constitute war crimes if civilian harm is disproportionate to military objectives.
International humanitarian law requires all parties in armed conflict to take precautions to minimize harm to civilians and civilian infrastructure.
The oil supply crisis is already sending shockwaves through the global economy.
Countries heavily dependent on imported energy are facing the prospect of soaring fuel costs, rising inflation, and renewed economic instability.
Analysts say Asia and Europe are particularly vulnerable because they rely heavily on oil shipments from the Persian Gulf.
Shipping companies have begun rerouting vessels around the southern tip of Africa to avoid the Strait of Hormuz, adding weeks to delivery times and dramatically increasing transportation costs.
Financial markets have also reacted nervously, with energy stocks climbing while broader equities fluctuate amid fears of a prolonged geopolitical crisis.
The scale of the disruption is forcing governments around the world to reconsider long-standing assumptions about global energy security.
For decades, the Persian Gulf has served as the backbone of the international oil system, providing a steady flow of relatively cheap energy to economies across the world.
But the current crisis underscores the vulnerability of that system to geopolitical conflict.
Energy strategists say the situation could accelerate investments in alternative supply routes, expanded strategic reserves, and renewable energy infrastructure.
The International Energy Agency warned that while the emergency release of oil reserves may help stabilize markets temporarily, it cannot fully replace the vast volumes of crude normally exported from the Gulf.
If the conflict continues and the Strait of Hormuz remains closed, the world could face an extended period of energy shortages and extreme price volatility.
