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Six months into the US-Israel military campaign against Iran, the global energy economy looks fundamentally different than it did in February. Brent crude has stabilized between $86 and $93 per barrel, roughly 25% above pre-war levels, and fossil fuel importers worldwide have collectively absorbed more than $330 billion in extra costs since the first airstrikes landed on February 28.
The blockade math
The Strait of Hormuz, the narrow waterway connecting the Persian Gulf to open ocean, has become the conflict’s economic chokepoint. Iran’s effective blockade of the strait has sharply curtailed crude and liquefied natural gas exports from the entire Gulf region, not just Iranian barrels.
For context, roughly a fifth of the world’s petroleum passes through that corridor in peacetime. Dueling blockades and shipping hazards have turned it into something closer to a no-go zone, forcing exporters to find alternative routes or simply produce less.
Gulf nations that depend on oil revenue are also feeling the squeeze. Reduced export volumes mean that even elevated prices have not fully compensated for lost sales, weakening fiscal positions across the region.
Winners and losers
China stands out as the clearest beneficiary on the supply side. The country has posted five consecutive record months of clean technology exports since the war began, capitalizing on a global rush to reduce fossil fuel dependence.
The human and military toll
The campaign began with airstrikes that killed Iran’s Supreme Leader Ali Khamenei. Casualty figures underscore the scale of the fighting. More than 3,375 Iranian deaths have been reported, alongside 18 US military fatalities and broader regional losses. Infrastructure damage to oil-exporting facilities has compounded the economic disruption, making a rapid return to pre-war export levels unlikely even if a ceasefire materialized tomorrow.
Mediation efforts by Oman and Pakistan have so far failed to produce a durable framework for de-escalation.
The 1970s comparison
The 1973 and 1979 crises were supply-side shocks driven by political decisions to withhold oil. The Iran conflict combines a supply disruption with physical destruction of export infrastructure and an active military blockade of the world’s most important oil transit route.
If the conflict extends well beyond six months, projections suggest the energy supply shocks could overshadow both the 1970s crises and the more recent disruptions linked to the Ukraine war.
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