Middle East war impacts global oil market

The war that began in late February between the United States, Israel and Iran quickly exposed the vulnerability of the Strait of Hormuz, a chokepoint for about 20 % of world oil and LNG supplies. In the days that followed, oil‑importing nations and regional producers moved to diversify supply routes, investing in new pipelines such as Saudi Arabia’s East‑West line, infrastructure in the United Arab Emirates and an Iraq‑Turkey corridor.

By late July, analysts were warning that the conflict could still trigger sharp oil‑price spikes as summer demand rises. OPEC+ policy choices, together with lingering geopolitical strain around the Hormuz and Bab el‑Mandeb straits, kept markets fragile. The International Energy Agency responded by drawing down strategic reserves, underscoring continued concerns over global energy security.

Overall, the conflict has shifted the oil market away from its pre‑war model, prompting long‑term infrastructure changes while maintaining short‑term price volatility and heightened vigilance among producers and consumers.