Gulf Energy Disruption and the Fragility of Global Markets

This blog is authored by Fatimah M. Alkayadi and MEI’s Karen E. Young.

The full energy implications of the US-Israeli war against Iran depend on two variables: the duration of the conflict, which has heavily impeded crude, refined products, chemicals, and liquefied natural gas (LNG) flows through the Strait of Hormuz, and the extent of longer-term damage to energy infrastructure across the Gulf. But even at this stage, the war has underscored a structural reality: the Gulf is both the backbone of global energy supply—accounting for a substantial share of global oil and gas production as well as refining and LNG capacity—and one of its most concentrated risk points. While this concentration has long supported efficiency and scale, the disruption of multiple assets simultaneously shows how a localized shock can massively disrupt global markets.

Photo by Shady Alassar/Anadolu via Getty Images

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