Oil surged toward $120 a barrel after Israel struck Iran’s energy infrastructure and Tehran named Mojtaba Khamenei as its new supreme leader. Brent crude briefly hit $119.50 before retreating; by Tuesday prices were trading below $90 but remained more than 20% above levels on February 28, when the conflict began.
The 10-day war has raised fresh alarm for global energy markets by putting Middle Eastern infrastructure at risk. Iranian strikes have targeted energy facilities, airports, hotels, residential areas and US military sites, drawing Gulf states into the fighting and prompting threats of further retaliation. Shipping through the Strait of Hormuz — a chokepoint that normally carries about one-fifth of the world’s oil — has been effectively halted, representing a worst-case scenario for supply.
With tankers stranded, Gulf producers are drawing on storage and routing exports via alternative corridors. Saudi Arabia and the UAE can divert some shipments through the Red Sea and the Gulf of Oman, but many smaller producers rely primarily on limited stockpiles. JP Morgan estimates collective Gulf storage at roughly 343 million barrels; about 15 million barrels per day of crude and more than 4 million bpd of refined products normally pass through Hormuz. JP Morgan calculated that Gulf states had an average buffer of around 22 days of storage on the day the war began.
Warnings have come quickly. Iran’s Islamic Revolutionary Guard Corps said Tehran would “determine the end of the war” and warned it would prevent “one litre of oil” from leaving the region if US and Israeli attacks continued. Rystad Energy cautioned that Iraq’s remaining fields faced an “imminent, near-certain shutdown.” Iraq — which had only six days of storage — reportedly exhausted stockpiles and has cut output by roughly 1.5 million bpd.
Saudi Arabia had more storage capacity; JP Morgan put its buffer at 66 days on February 28. Still, Rystad estimated Saudi Arabia’s effective runway before forced cuts at seven to nine days, given logistical constraints and continued strikes. Saudi Aramco has begun rerouting exports to the Red Sea port of Yanbu, and the UAE has shifted some shipments through Fujairah, but those alternatives replace only about a third of the usual Hormuz throughput.
Bloomberg-cited reports say Saudi output has fallen by as much as 2.5 million bpd, the UAE by 500,000–800,000 bpd, Kuwait by about 500,000 bpd and Iraq by around 2.9 million bpd. A full stop to Gulf exports would likely push prices much higher: Qatar’s energy minister warned crude could reach $150 a barrel if production halts. Saudi Aramco warned of “catastrophic consequences” if disruptions in Hormuz persist. ING noted that the longer the crisis continues, the more supply will be “shut‑in,” and the IEA warned that prolonged interruptions could quickly turn a recent surplus into a deficit.
Restarting shut-in production can take days to weeks; an extended shutdown risks equipment damage and geological complications that could prolong outages.
Damage to facilities has already occurred. On March 2 Iranian drones struck Ras Tanura, Saudi Aramco’s largest refinery and a major export terminal (about 550,000 bpd refining capacity), prompting a shutdown for inspection. Iran also struck Qatar’s Ras Laffan LNG complex; QatarEnergy halted operations and declared force majeure. Sporadic attacks have continued despite an apology from Iranian President Masoud Pezeshkian: strikes hit Bahrain’s Sitra island and the Al Ma’ameer refinery, and Saudi air defenses intercepted drones headed for the Shaybah oil field. While US President Donald Trump said the war would be over “very soon,” Iran launched additional strikes on Kuwait, Bahrain and the UAE early Tuesday, and Saudi forces reported destroying more drones.
Edited by Andreas Becker
Editor’s note: This article was first published on March 9, 2026 and updated on March 10 to reflect the latest developments.