The long shock: How the Iran war is remaking the global economy
The US and Israeli-led war on Iran has caused the most significant oil supply disruption in modern history, with Iran's retaliatory strikes against energy infrastructure in several countries and its effective closure of the Strait of Hormuz. A prolonged blockade could dwarf the economic impact of Russia's invasion of Ukraine and cause lasting damage to the global economy.
The US and Israeli-led war on Iran has initiated a chain reaction, culminating in the most significant oil supply disruption in modern history. Iran's retaliatory strikes against energy infrastructure in Saudi Arabia, Qatar, Iraq, Kuwait, and the UAE, and its effective closure of the Strait of Hormuz, sent immediate economic ripples across the globe. The Strait of Hormuz, which daily transited 20 to 21 million barrels of oil and a fifth of global liquefied natural gas (LNG), was effectively blocked. By March, production losses across the Gulf reached between 6.7 and 10 million barrels per day. The International Energy Agency (IEA) termed this the greatest supply crisis in its history. Brent crude surged past $120 in March and remains in a 'crisis range' of $95 to $110.
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