Middle East War Threatens Global Oil Supplies as Attacks Intensify

Shibbir Ahmed, NEW YORK — The escalating war in the Middle East is threatening to deepen disruptions to global oil supplies as fresh attacks target shipping and energy infrastructure in Saudi Arabia and around the strategically vital Strait of Hormuz.

A vessel was struck by a projectile while transiting the Strait of Hormuz on Sunday, forcing its crew to evacuate after a fire broke out, according to the British maritime security agency UKMTO. An Iranian commercial vessel was also hit off Iran’s coast, killing one person and injuring four others, further raising concerns about the safety of commercial shipping in the region.

The latest incidents came after Saudi Arabia shut down its major East-West oil pipeline following a drone attack. The pipeline, which normally carries millions of barrels of crude per day to the Red Sea, has served as a critical alternative route while shipping through the Strait of Hormuz has been heavily disrupted.

Reuters reported Sunday that the pipeline outage could threaten as much as 4% of global oil supply if it is not restored within days. Saudi Arabia has not provided a detailed timeline for repairs, while traders and oil buyers have offered varying estimates for how long the disruption could last.

The supply concerns are being compounded by growing instability around another major maritime chokepoint, the Bab el-Mandeb Strait. Iran-aligned Houthi forces in Yemen have advanced along the Red Sea coast, increasing the risk of further disruption to oil and commercial shipping routes.

Global oil markets have already reacted sharply to the worsening situation. Brent crude has moved above $100 a barrel, while fuel prices have climbed as traders assess the possibility of prolonged disruptions to supplies from the Middle East. Reuters reported that U.S. diesel prices have also reached record levels.

The International Energy Agency has warned that global oil supply could decline by about 5.7 million barrels per day, or 6%, in 2026 because of the continuing conflict and disruptions in the Gulf. Saudi oil production has also fallen sharply from earlier levels.

The developments have raised fears that a prolonged conflict could push energy prices even higher, increasing transportation and production costs and adding to inflationary pressures around the world.

Diplomatic efforts to ease the crisis are continuing, but negotiations involving Iran and Gulf states over safe navigation through the Strait of Hormuz have faced delays. Iran has indicated that reopening the waterway would require concessions from the United States.

With both the Strait of Hormuz and Bab el-Mandeb facing heightened security risks, global energy markets are increasingly vulnerable to further attacks. Any prolonged disruption at both routes could have consequences well beyond the Middle East, affecting fuel prices, shipping costs, inflation and economic growth worldwide.