Iran War Disruptions May Last Until 2027, Fuel Prices to Rise

The ongoing war in Iran and restrictions on the Strait of Hormuz are expected to cause disruptions in oil supplies until early 2027, according to a forecast by the US Energy Information Administration. This is based on estimates that an average of 4.9 million barrels of oil per day passed through the strait in the second quarter of 2026, down from 21.6 million barrels per day in the fourth quarter of 2025.

Despite a brief pause in hostilities, the situation remains tense as Iran and Oman have yet to reach an agreement on reopening the strait. This has led to fuel prices increasing globally, with the EIA raising its forecast for gasoline and diesel prices in 2026 by 3.7% and 5.4%, respectively.

U.S. Energy Secretary Chris Wright estimated that around 9 million barrels of oil per day have passed through the strait over the past week. The reduction in Middle East production has decreased from 7.5 million barrels per day in June to approximately 5.5 million in July, and is expected to rise to 6.6 million barrels per day in the third quarter.

The EIA expects most oil flows and trading operations to return to prewar levels by early 2027, provided there are no further production cuts due to threats to vessels carrying Saudi oil in the Bab el-Mandeb Strait area.