Energy analysts warned on Monday that the escalating conflict involving Iran has created what they described as a dual supply shock to global oil markets — one that simultaneously disrupts current exports and renders the broader OPEC+ buffer capacity inaccessible. The warning came as oil prices rose sharply and the Strait of Hormuz faced effective closure, with ships unable to move freely through one of the world’s most critical energy corridors.
The first element of the supply shock is the direct disruption to current oil and gas exports. Iran, which produces approximately 4.5% of global oil supplies, faces severe disruption to its own shipments. Qatar’s LNG production has been halted entirely, threatening to remove nearly 20% of global LNG supply. The Strait of Hormuz, through which one-fifth of global oil flows, has been rendered impassable by a combination of Iranian warnings and actual attacks on vessels.
The second element of the shock is perhaps even more significant in the long run. OPEC+ maintains spare production capacity that is typically used to balance the global oil market during periods of supply disruption. However, the vast majority of this spare capacity is held by producers in the Middle East — capacity that, even if it could be brought online, would face the same shipping bottlenecks as existing exports while the Strait of Hormuz remains closed.
OPEC+ did agree to a modest production increase of 206,000 barrels per day for April, but analysts pointed out that this additional output does little to address a supply shock of the current scale. With existing exports blocked and spare capacity stranded, the traditional mechanisms for stabilizing the global oil market are effectively paralysed. This is precisely the scenario that energy security experts have long warned about as the most severe possible disruption.
Some analysts suggested that oil prices could exceed $100 a barrel unless the Strait of Hormuz is reopened quickly. At that level, the consequences for the global economy would be significant, adding to inflationary pressures, dampening consumer spending, and weighing on growth prospects across both developed and emerging markets. The situation was described as one of the most serious threats to global energy security in more than a decade.