Middle East Energy Sector Trapped in Prolonged Instability

The Middle East's energy sector is facing a prolonged period of uncertainty due to ongoing conflict between the US, Israel, and Iran. This has disrupted one of the world's most critical oil-producing regions, causing instability in global energy trade.

More than five months into military operations, Gulf energy infrastructure remains under pressure. Shipping routes have become vulnerable, energy facilities continue to face attacks, and major importers are reevaluating their dependence on Middle Eastern supplies.

The Strait of Hormuz is a key flashpoint in the crisis, but it has expanded into the Red Sea following attacks by Yemen's Iran-backed Houthi movement on Saudi-linked shipping. Recent attacks have further reduced export capacity, with combined exports from Gulf producers and Saudi Arabia's western coast falling sharply from wartime highs.

The disruption highlights how multiple maritime chokepoints are now influencing global energy security simultaneously. A major diplomatic development has emerged around the future management of the Strait of Hormuz, with Oman proposing a framework that would grant Iran a role in managing maritime traffic and collecting voluntary transit fees.