Once again the world is looking with alarm towards the Middle East. On the morning of 28 February, Israel and the USA launched an assault on Iran. The attacks cost the lives of the spiritual leader, Ali Khameini, and other high-ranking politicians and military commanders of the country. Iran responded with rocket and drone attacks on Israel and other states in the region. Tehran simultaneously threatened to blockade the Strait of Hormuz. This brought an eye of the needle of the global economy into focus. Ships transit this narrow waterway between Iran and Oman from the Persian Gulf to the Gulf of Oman and from there to the open ocean. According to figures from analytics firm Kpler, 30% of the crude oil transported by sea each day travels through the two 3-kilometre-wide shipping lanes. This goes alongside large quantities of petrol, diesel, liquefied natural gas (LNG) and jet fuel (kerosene). “The Strait of Hormuz is the world's single most critical energy chokepoint,” Kpler stated at the start of the war. A blockade could therefore trigger supply shocks across multiple commodity classes simultaneously.
In addition to the fear of attacks – ships were already being targeted in the first few days of the conflict – the lack of insurance cover led to a massive backlog of tankers. A number of insurers have announced their intention to terminate policies covering war risks in the region. Given this background, the strong reaction of the commodities markets came as no surprise. Since the beginning of the Israeli-American attacks on Iran, the price of a barrel of North Sea Brent crude has risen by almost half, bringing the energy source to its highest level since summer 2022. Futures contracts based on petrol and European natural gas reacted with even stronger upward swings.
The latest increases are to a large extent simply pricing in a risk premium, because in principle there is no question of an energy shortage. In its forecast, published two weeks before the outbreak of war, the U.S. Energy Information Administration (EIA) predicted record-high global oil consumption of 104.8 million barrels per day on average for 2026, but expected production to exceed this amount by more than 3 million barrels per day. Global storage tanks are already full to the brim now. According to the International Energy Agency (IEA), global oil reserves in 2025 rose by 477 million to just under 8.2 billion barrels. China in particular has filled its tanks, increasing its stocks by 111 million barrels last year. The quantity of oil stored temporarily in ships at sea even climbed by 248 million barrels – with almost three quarters of this quantity reckoned to be under sanctions. In the view of Commerzbank Commodity Research, total global reserves would be sufficient to cover a complete cessation of supplies through the Strait of Hormuz for a whole year.
The analysts emphasise, however, that this is a theoretical assumption. In actual practice, a full closure of the strait could see the oil supply collapse by about a fifth. The longer-term outlook thus depends heavily on how the conflict develops. Should the situation in the Middle East ease, this could quickly lead to a reduction in the risk premium and a decline in the price of oil. What is certain is that the latest happenings also put the focus on shares in the sector. J.P. Morgan even talks of a “game changer” for the European oil multinationals. In the view of the US analysts, the leading groups on the Old Continent are set to benefit from low costs, favourable valuations and solid reserves. The experts at Citigroup are singing from the same hymn sheet and consider energy stocks to be attractively valued. It is not only in Europe that the sector is showing considerable momentum, however: US oil giants such as Exxon Mobil and Chevron were in heavy demand on Wall Street at the beginning of March.
As at 1 March 2026; source: Kpler
As at 12 March 2026; source: Reuters Past performance is not a reliable indicator of future performance.