Iran Conflict Triggers Global Oil Supply Crisis

The ongoing conflict in Iran has caused significant disruptions to global oil supply, with nearly half of the world's oil now sourced from areas affected by conflict. According to Al-Monitor, this marks one of the most severe oil supply crises on record, as geopolitical tensions disrupt key supply routes such as the Strait of Hormuz.

The International Energy Agency (IEA) has reported that global oil supply is projected to decrease by 4.3 million barrels per day in 2026, exacerbating supply constraints previously unseen at this scale. The reduction in oil exports from the Middle East, averaging 9.5 million barrels per day in August, further contributes to the crisis.

Market pricing suggests that participants view the ongoing oil supply crisis as consistent with scenarios where crude oil may reach new all-time highs, reflecting higher oil price expectations due to the significant decrease in Middle East oil exports and heightened geopolitical tensions.