The chaos in the Persian Gulf caused by Tehran’s response is skyrocketing the price of oil and, above all, natural gas in the face of threats to supply. The European reference for the price of natural gas, the TTF contract negotiated in the Netherlands, soars by more than 40% following the closure of the Ras Laffan liquefied gas (LNG) plant, attacked by Iranian drones. Qatar is the second largest exporter of liquefied gas in the world and the main supplier to the European Union, after the United States. Hours earlier, production at the Saudi Ras Tanura refinery, one of the largest in the world, had been paralyzed, attacked by a drone. The price of Brent oil soars 9% to $79 per barrel.
Added to these interruptions is the effective blockade of the , through which supertankers and liquefied gas ships have stopped circulating. The extension of the conflict to other Gulf countries is exacerbating fears of crude oil: the Persian Gulf area is the world’s main source of oil and gas, and around a fifth of the world’s maritime trade in oil and liquefied natural gas flows through the Strait of Hormuz. An average of 14.5 million barrels of oil travel through the strait each day. Of them, 90% go to Asia. The impact is also noticeable in refined products: diesel futures also rise by 20%.
The sea lane, a corridor between Oman and Iran of a few dozen kilometers at its narrowest part, has not yet been physically blocked, but shipping companies and oil transporters have halted operations, and about 150 vessels are paralyzed in the area, according to Reuters. Iran has reported attacks on three oil tankers owned by the United States and the United Kingdom, and the US Department of Transportation issued a recommendation that commercial ships avoid sailing through the strait, the Persian Gulf, the Gulf of Oman and the Arabian Sea. Tanker traffic “appears to be significantly disrupted as many shippers, oil producers and insurers have adopted a cautious wait-and-see attitude,” Goldman Sachs analysts note in a note. “As far as we know, there is no confirmed damage to oil production or export infrastructure.”
Regarding gas, the situation represents the harshest impact on the markets since four years ago. While Asian countries buy the majority of LNG transported from the Middle East, any disruption will increase competition for alternative supplies, which could drive up prices around the world, including Europe. Once again, uncertainty around the magnitude and duration of the current conflict, and ambiguity over Iran’s political future, are at the center of the storm.
“The most immediate and tangible change affecting the oil markets is the effective interruption of traffic through the Strait of Hormuz, which prevents 15 million barrels per day (bpd) of crude oil from reaching the markets,” Jorge León, head of geopolitical analysis at Rystad Energy, tells Reuters. “Unless signs of a detente emerge, we expect a significant rise in oil prices.” This analyst estimates a price range of between $85 and $90 per barrel. Morgan Stanley, for its part, has raised its forecast for second-quarter Brent to $80 per barrel from $62.50.
OPEC+ agreed on Sunday to a small increase in oil production of 206,000 barrels a day for April, but much of that product must still leave the Persian Gulf in tankers. Iran pumps about 3.3 million barrels a day, or 3% of global production, and is also subject to sanctions. Oil from the Persian Gulf must pass through this route to reach important markets such as China, India and Japan. In this context, any news of interruption fuels nervousness: according to Reuters, the oil company Saudi Aramco has been hit by the remains of two Iranian drones at the Ras Tanura refinery, in Saudi Arabia, and has stopped the operations of some units as a precautionary measure.
“In our view, the closest historical equivalent is the Middle East oil embargo of the 1970s, which increased oil prices by 300% to around $12 a barrel in 1974,” says Alan Gelder, senior vice president of oil markets at Wood Mackenzie. “That is equivalent to $90 per barrel in 2026. Exceeding this figure in the current market, concerned about significant supply losses, seems very feasible.” The psychological barrier of $100 a barrel now does not seem so far away.
Experts point to insecurity about the future of Iran, the fourth largest oil producer, as the first risk for the markets, given the complexities of the Islamic Republic’s system of government, the ideological and religious nature of its support base and the power of its Revolutionary Guard. “Risks in the Middle East have increased. Markets will readjust their prices, moving from a shock geopolitical to a shock due to the risk of a prolonged conflict, unless Iran expresses its willingness to negotiate,” says Rong Ren Goh, manager of Eastspring Investments.
The markets predict that the duration and consequences of the attack will be limited, as occurred during the one between Israel and Iran and, with many precautions, analysts do not contemplate, for the moment, a change of the Iranian regime as happened in 1979. Samy Chaar, chief economist at Lombard Odier, considers two scenarios for the conflict: one, “of limited escalation and a limited increase in the price of oil.” The second, which is not the main scenario, “is a global oil shock, with a prolonged closure of the Strait of Hormuz and a strong military confrontation, which would lead to an increase of up to $50 per barrel in the price of oil.”
The key, once again, will be around the strait. “We believe that the pace of traffic recovery through Hormuz and the extent of Iranian retaliation will be key for the oil price in the coming days,” UBS analysts say in a note.
Although experts are not considering an extension of the conflict, it does not seem that it will be resolved very quickly. Donald Trump has assured that the United States will continue attacking Iran “until all objectives are achieved” and has estimated that the attacks could last up to four weeks.
“We anticipate that Brent oil will be priced in the range of 80 to 90 dollars per barrel, according to our base scenario, at least for the next week,” say Citigroup experts, who do consider a regime change in Iran among their options, in a note to their clients reported by Bloomberg. “Our baseline perspective is that the Iranian leadership changes, or that the regime changes enough to stop the war in a week or two, or that the United States decides to de-escalate the conflict after having seen a change in leadership and a setback in Iran’s missile and nuclear program,” they added.
In this sense, Haris Khurshid, investment director of Karobaar Capital, believes that only if tanker traffic resumes quickly, or if there is a de-escalation or if diplomatic talks advance “the pressure can be lowered.” Otherwise, oil “will likely consolidate at elevated levels.”
