Gulf Conflict Escalation Sparks Global Energy Crisis Warning
The ongoing conflict in the Gulf region has again disrupted oil and gas exports through critical shipping routes, putting the world's energy markets at risk of severe disruption.
A recent escalation saw Iran widen its reach by enlisting Houthi proxies to target Saudi Arabia's crude exports passing through the Bab el-Mandeb Strait, further limiting global supply chains.
This has triggered a perilous dilemma for oil and LNG markets, which are now facing a binary outcome: allow the conflict to persist and face dire economic consequences or strike a sustainable deal to unlock constrained supply back into the market.
If no agreement is reached, Wood Mackenzie warns of an inevitable global recession, with up to 12 million barrels per day (b/d) of liquids production and 86 million tonnes of LNG output shut in, putting immense pressure on energy prices.