Gulf Nations Keep Oil Flowing Amid Iran War, But Costs Mount
When Iran shut down the Strait of Hormuz at the start of the war in March 2026, the world feared that oil prices would skyrocket due to the disruption of sea passage for some 15 million barrels of oil a day. However, Gulf nations have managed to keep oil flowing through various measures, albeit at a mounting cost.
The Strait of Hormuz is a critical waterway connecting the Middle East to global markets. Iran's closure of the strait initially raised concerns that it could lead to higher prices and economic instability. But instead of a price hike, diesel prices in the US remained steady, with no significant increase reported by September 10, 2026.
Despite maintaining oil flow, Gulf nations are incurring increasing costs due to the ongoing conflict. The recent drone attack on Saudi Arabia's East-West pipeline, captured by satellite image provider Vantor on September 13, 2026, has further exacerbated these expenses.