Rising military tension in the Middle East is putting pressure on energy markets and rekindling fears of global supply disruptions.
Global energy markets are currently reacting to escalating tensions in the Middle East, as military hostilities intensify between the United States and Israel on one side, and Iran on the other. This development threatens oil supplies and raises significant concerns about the stability of the global economy.
So far, markets have not recorded any major interruptions in oil flows, but the risks associated with vital maritime passages, especially the Strait of Hormuz, remain high, especially if military confrontations in the region persist.
The Strait is one of the most crucial energy arteries in the world, through which approximately 20 percent of the global oil demand and nearly 30 percent of seaborne oil exports pass. This makes it a sensitive hotspot for any potential supply disruptions.
These tensions have quickly reflected in the markets, with Brent crude prices surging over 10 percent at the start of trading on Monday, indicating an increase in geopolitical risk premiums, even without any direct disruptions to production or transportation recorded so far.
Before this escalation, the oil market was trending toward an oversupply, driven by increased production from non-OPEC+ producers, alongside a rapid pace of global inventory rebuilding, which kept 2025 prices around an average of $68 per barrel.
However, recent military developments have overturned expectations, raising sharp questions about supply security in a region that is the world’s primary energy source.
In this context, Robin Nizar, head of sector research at Coface, warned that the economic impact could remain limited if the conflict remains short-lived. However, he noted that prolonged tensions could push oil prices to record levels exceeding $147 per barrel, with broader implications for the global economy that extend beyond just energy prices.
Estimates suggest that any actual disruption to navigation in the Strait of Hormuz could trigger a significant shock to global energy markets, given the volume of oil that passes through this vital maritime corridor daily, placing the region once again at the center of the international economic stability equation.
