Why This War With Iran May Be Far Longer Than Markets Expect

By Kurt Cobb - Mar 09, 2026

• Iran defines victory as regime survival, making a negotiated end far less likely.
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• Air power alone is unlikely to deliver the outcome Washington and Israel say they want.
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• A prolonged war could devastate regional energy infrastructure and trigger a global economic shock.

Two weeks ago, I suggested that the complacency regarding war with Iran was misplaced and that that complacency was likely soon to be replaced by panic in the world's capitals and financial markets. The general belief was that President Donald Trump would relent, make a deal with Iran, and declare victory. Even if he didn't, the Iranian regime would be quickly overwhelmed by a combined American and Israeli attack and possibly be overthrown in a popular revolt or in the alternative, sue for peace within days.

Of course, neither of those things turned out to be the case. The complacency has now vanished. Leaders in at least some capitals are panicking, though the financial markets continue to respond in a surprisingly muted way to the risks this war poses for the world economy.

Here is the most important thing readers should understand about this war: Iran defines winning the war very narrowly. Victory for the Iranian regime is that the regime survives. Israel and the United States define winning as the fall of the current regime, leading either to a new friendly regime or a breakup of the country into various parts. And just last Friday, President Trump added that the "unconditional surrender" of Iran is the only acceptable outcome. Now consider the remarks of the Iranian foreign minister to NBC: "We are not asking for a cease-fire and we don't see any reason why we should negotiate with the U.S." He pointed out that the United States has used two previous negotiations as a deceptive cover for attacks. So, it looks like this conflict will be a fight to the finish.

Here's a second important thing to understand: To believe that the United States and Israel will prevail with air power alone flies in the face of all historical precedent. One prominent example is the Vietnam War. The United States dropped a greater tonnage of bombs on Vietnam, Laos, and Cambodia than in all of World War II. And, the United States had a substantial force on the ground. At its peak the deployment was more than 500,000 military personnel. And yet, the North Vietnamese prevailed.

In trying to decipher the events of this war, logic is your friend:

1. Since the Iranians no longer believe that the Americans will negotiate in good faith, they seek no negotiated settlement. And, the Americans and Israelis no longer seek a negotiated settlement but unconditional surrender. This means that the members of the Iranian regime and its military have no incentive to do anything but continue their counterattacks and wait for the Americans and Israelis to land a ground force in Iran to come get them. This would likely be true even if Iran runs out of offensive drones and missiles.

2. The general belief is that the Americans will NOT deploy soldiers on the ground in Iran in large numbers because various members of the Trump administration have said that that will be unnecessary. That expectation could be wrong. If it is, it would likely take months to prepare an expeditionary force of sufficient size to successfully invade Iran. Then, that force would have to land on the coastline of Iran and make its way through mountainous terrain that characterizes much of Iran. Logic suggests that this could quickly become a catastrophic invasion for the Americans. (I'm assuming only minor participation by Israel whose military is already fully occupied.)
3. Even if a ground campaign were ultimately successful, it might take a year or two to subdue Iran. In a moderately bad scenario for the Americans, it could take many more years. In a seriously bad outcome, the United States military could be bogged down for a decade or more with no decisive result.

4. Let's assume that no invasion takes place. That means that the Americans and Israelis are left with bombing Iran into rubble. That might not lead to a clear victory, but it would destroy Iran's economy. In response and with nothing to lose, Iran may decide to use its remaining arsenal of missiles and drones to simply destroy the oil and gas infrastructure of every energy exporting country it can reach. The list includes some of the largest oil and liquefied natural gas exporters in the world: Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Such destruction would create a long-term energy crisis for the world. Iran has so far shown its willingness to engage in economic warfare—effectively closing of the Strait of Hormuz through which transits 20 percent of the world's crude oil and liquefied natural gas exports—even when it hurts its own economy. Why not hurt everyone else if there's nothing to lose?
   
5. I have no way of knowing how long this conflict will go on. But the longer it goes on, the larger its impact on energy prices and the world economy will be. For a comprehensive tally of what will be affected and when, read this analysis. For what exactly will be affected beyond oil and natural gas, here's a partial list: apparel (made from petrochemicals), food (because natural gas is a major feedstock for nitrogen fertilizer), copper (the mining of which requires chemicals derived from oil), packaging (made from petrochemicals), tires (made from petrochemicals) and electricity (natural gas and diesel fired power plants).

I have by no means provided anything close to an outline of all plausible trajectories for the war with Iran. I'm not sure anyone could. There are too many variables, and this is a human endeavor. Humans are much more unpredictable than nature. What readers can do is apply logic to this situation and ask whether what they are hearing from each side of the conflict and from the media makes logical sense. Much of it does not.

By Kurt Cobb via Resource Insights

Oil Shock Spreads Through Global Economy

By Irina Slav - Mar 09, 2026

• Brent Crude and West Texas Intermediate have climbed above $100, with Brent briefly topping $116 as tanker traffic through the Strait of Hormuz remains severely disrupted.
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• Very few tankers are crossing the chokepoint, leaving millions of barrels stranded.
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• Higher fuel costs and uncertainty around the conflict could strain energy-importing economies, with some major industries such as airlines already feeling the pinch.

Brent crude and WTI are once again above $100 and likely to stay there longer than those involved in the planning of the latest war in the Middle East may have expected. With that, energy-thirsty economies are beginning to feel the pinch, and not everyone is optimistic that it will be a short pinch.

Brent crude, the global benchmark, surged past $116 per barrel earlier today, with West Texas Intermediate also reaching that level in a rare parity between the two. Murban crude, meanwhile, has hit $120 and sped past it, reflecting the continued freeze of most tanker traffic in the Strait of Hormuz. Israel-based maritime intelligence firm Windward reports that crossings of the chokepoint remained significantly below the average over the weekend, with a total of three for Saturday, compared to a seven-day average of 13.43—and a pre-war average of 100. Media are reporting that Iran is widening its target environment—and the country just got its new supreme leader, who is described as a hardliner.

None of this bodes well for global energy security. Aware of that fact, the Trump administration has tried to calm things down by promising federal insurance for tankers in the Strait and a navy escort for vessels. Both of these have yet to materialize, with reports suggesting shipowners were unsure how the federal insurance would work.

Meanwhile, the Navy escort idea would be challenging to put into practice due to the sheer number of tankers currently stuck around the Strait of Hormuz. “There’s hundreds and hundreds of vessels still in the Mideast Gulf,” Matt Wright, a senior freight analyst at Kpler, told CNBC last week. The U.S. Navy would need “an inordinate amount of time to escort them even a few at a time.”

In a further sign that the supply squeeze could last for a while yet, the U.S. administration lifted some sanctions on Russian crude, with U.S. ambassador to the UN Tim Waltz saying that “It's a 30-day pause to allow, which is just kind of common sense, to allow the millions and millions of barrels of oil that are sitting out on ships to go to Indian refineries.”

These millions of barrels sitting on ships, by the way, were just a month ago considered a supply overhang by analysts who kept their oil price forecasts bearish due to that supply overhang. How fast things could change in the world of oil when there’s a war near a supply hub could—and should—be a teachable moment.

Energy Secretary Wright tried to instill a sense of optimism among consumers by essentially pointing out that with no pain, there would be no gain. “If this is brief in duration, it’s a small dislocation,” Wright told the Wall Street Journal last week in an interview. “It’s a small amount of short-term pain for enormous long-term gain for peace and stability and investment in the Middle East.” Wright noted that the war comes “with U.S. oil production at all-time highs, a world well-supplied in oil, [and] new increases in production coming out of Venezuela.” The official noted that currently people are reacting emotionally to the situation because of uncertainty how things will go, but in the end “rationality wins out” on oil markets.

It appears that the big surprise for both analysts and traders was the scale of Iran’s counter-attacks after the United States and Israel first struck it—and the speed of those counter-attacks. This suggests that the majority of professional observers were biased in favor of a best-case scenario and quite dismissive of the worst-case scenario that is currently unfolding—hence the emotional reaction Secretary Wright spoke about.

Besides the emotional reaction, however, the hard fact remains that a lot of oil is stuck in the Persian Gulf and the more time passes, the less supply there will be as producers begin to wind down output for lack of enough storage capacity. Even if all sanctions on Russian oil are lifted—and the EU is unlikely to agree to that easily—this won’t be enough. Even if Venezuelan crude production doubles, it would still not be enough, because the Strait of Hormuz handles 14 million barrels of crude oil daily, according to Kpler data cited today by Reuters columnist Clyde Russell.

Those 14 million barrels daily are pretty much gone at the moment. Windward reports that only one of the three vessels that passed the Strait on Saturday was a tanker. While this is temporary, no one seems to know just how long “temporary” means in the context of this latest war. This uncertainty, coupled with the steps being taken by Middle Eastern producers to reduce supply, is bound to cause even more pain to economies around the world—except China. China has amassed oil reserves of about a billion barrels, per Russell.

By Irina Slav for Oilprice.com

The Chokepoint Economy: What Happens When Everything Breaks at Once

By Michael Kern - Mar 09, 2026

• The coordinated closure of the Strait of Hormuz and the Bab el-Mandeb Strait has triggered a dual-chokepoint crisis, crippling global shipping and resulting in massive, immediate cost increases for oil, LNG, and maritime insurance.
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• Beyond the immediate energy shock, the crisis is causing a critical fertilizer shortage due to a halt in Gulf production and shipping, which is predicted to result in a severe decline in crop yields and higher grocery bills months later.
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• This war-driven shock, layered on top of existing political and tariff uncertainty, is projected to accelerate global inflation and threatens to tip major world economies into stagflation due to the simultaneous disruption of multiple transmission channels like energy, shipping, and air cargo.
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I want to talk about the thing nobody in Washington seems willing to say out loud, which is that the cost of this war is going to show up at your kitchen table before it shows up in any congressional budget hearing.

This morning oil prices blew past $115 a barrel. Brent crude touched $119 overnight before pulling back. WTI posted its biggest weekly gain in the entire history of futures trading, dating back to 1983. 

The S&P futures are down. 

The Nikkei dropped 5% at open.

South Korea’s KOSPI cratered 6%.

The VIX is at levels we haven’t seen since Trump’s “Liberation Day” tariff tantrum last April. 

And the President of the United States went on Truth Social last night to call surging oil prices “a very small price to pay.”

He is, at this point, the only person in the world who thinks that.

So here’s where we are… 

On February 28, the United States and Israel launched coordinated airstrikes on Iran…Operation Epic Fury, if you want the Pentagon branding…targeting military facilities, nuclear sites, and leadership. 

The strikes killed Supreme Leader Ali Khamenei. Iran retaliated. Missiles hit U.S. bases in Qatar, the UAE, Bahrain. Drones struck a desalination plant in Bahrain, energy facilities in Saudi Arabia and Kuwait, and a fuel storage depot in Dubai’s Jebel Ali port. A dockworker was killed. Seven American service members have died. 

As of this morning, Iran’s Assembly of Experts has named Mojtaba Khamenei, the dead Supreme Leader’s son, as his successor, which is the geopolitical equivalent of changing the nameplate on the door.

We are nine days into this war, and nobody’s stopping.

But I’m not writing about the war. Not really. I’m writing about what the war is doing to the invisible infrastructure of the global economy, the shipping lanes and insurance markets, fertilizer contracts, and airfreight corridors that nobody thinks about until they break. 

Because they’re breaking right now, in ways that will take months to repair, and the people who will pay for it aren’t the ones making the decisions.

The Chokepoint

The Strait of Hormuz is 21 miles wide at its narrowest point. Through that gap moves roughly 20 percent of the world’s oil, about 20.9 million barrels per day. It also carries a significant share of global liquefied natural gas, a third of the world’s seaborne fertilizer exports, and a meaningful slice of container traffic linking Asia, Europe, and the Middle East.

It is, as of right now, essentially closed.

Not formally. Nobody has dropped a chain across it. But Iran’s Revolutionary Guard declared the waterway shut to allied shipping. 

Protection and indemnity insurers pulled coverage. War-risk premiums, which had already tripled in the days before the strikes, became irrelevant once insurers stopped offering any coverage at all. 

And without insurance, no shipowner will send a vessel through. It’s not the missiles that closed the Strait. It’s the actuarial tables.

Tanker traffic through the Strait of Hormuz has dropped from an average of 138 vessels per day to roughly two. 

One hundred and fifty tankers are sitting at anchor in open Gulf waters. 

One hundred and forty-seven container ships are trapped inside the Persian Gulf, unable to exit. 

Maersk, CMA CGM, Hapag-Lloyd, MSC, every major container line, has suspended operations. Maersk paused two key services linking the Middle East to Asia and Europe and halted all trans-Suez sailings through the Bab el-Mandeb Strait. 

The Houthis, who had eased up on Red Sea attacks in recent months, announced they’re resuming. So now both chokepoints are closed, and the only way around is the Cape of Good Hope, which adds 10 to 14 days to every voyage.

This is what a dual chokepoint crisis looks like. It’s never happened before in modern container shipping.

Let me put this in dollars. 

LNG shipping charter rates went from $40,000 a day to $300,000 a day in less than a week. That’s a 650 percent increase. 

Asian spot LNG prices doubled. 

Qatar halted all LNG production at its Ras Laffan hub, the largest LNG export complex on Earth, after Iranian drones hit facilities there, and declared force majeure on its contracts. 

Qatar and the UAE together supply roughly 20 percent of the world’s LNG, and 85 percent of Qatar’s exports go to Asia.

China, India, Japan, South Korea, Taiwan, all scrambling for replacement cargoes from the United States, Australia, or West Africa, at multiples of the old price, on ships that now cost seven times more to charter.

European wholesale gas prices surged more than 50 percent in a single day, the biggest move since the Russia-Ukraine chaos of 2022. 

The Asian LNG premium over European prices hit a multi-year high, indicating traders are routing every available molecule to Asia and squeezing Europe on the back end. 

Energy Aspects director Amrita Sen put it plainly: “There’s no spare capacity in the LNG market.”

And this is just gas.

The Oil Shock You Were Promised You’d Never See Again

Crude oil has risen roughly 50 percent since February 28. That’s not a typo. 

Brent was trading around $70 a barrel before the strikes. It touched $119 overnight. 

WTI has moved from $67 to over $115. 

Iraq, the second-largest OPEC producer, has seen output from its three main southern oilfields collapse by 70 percent, from 4.3 million barrels per day to 1.3 million, because there’s nowhere to put the oil. 

Kuwait has cut production preemptively. The UAE is “carefully managing offshore production levels.”

Everyone in the Gulf is producing less because the tankers can’t get out.

Meanwhile, Israel struck a major fuel storage facility near Tehran over the weekend. 

Saudi Arabia’s 550,000-barrel-per-day Ras Tanura refinery has been hit twice. Drones even targeted Saudi Aramco’s million-barrel-per-day Shaybah oil field. 

We are watching the physical destruction of energy infrastructure in real time, which means this isn’t just a shipping problem. Even when the Strait reopens, some of this supply isn’t coming back quickly.

The average American gasoline price was around $3 a gallon before the strikes. As of Sunday, it’s $3.45, according to AAA—up 50 cents in a week. 

Energy Secretary Chris Wright went on Fox News and said higher prices are “a small price to pay.” 

The President echoed that. 

Goldman Sachs published a worst-case scenario predicting $100 oil within five weeks. It happened in five days.

The Stuff Nobody’s Talking About

Here’s where it gets interesting, and by interesting I mean quietly devastating.

Fertilizer. 

Modern agriculture runs on natural gas. Not metaphorically. Ammonia, the base ingredient in most nitrogen fertilizers, is synthesized from natural gas through the Haber-Bosch process. 

A huge share of global ammonia and urea production is concentrated in the Gulf states, because that’s where the cheap gas is. 

A third of the world’s seaborne urea exports move through the Strait of Hormuz. And the natural gas that powers fertilizer plants elsewhere—including in India, which depends heavily on Qatari LNG for its domestic urea production—also moves through the strait.

Egyptian urea prices have already shot up 35 percent this week. Sulphur prices are surging. 

Nearly half of global sulphur trade originates in the Middle East. And this is hitting at the worst possible moment: spring planting season in the Northern Hemisphere, when farmers are making their purchasing decisions for the year. 

Even modest reductions in nitrogen application produce disproportionately large declines in crop yield. 

We’re not going to feel this at the grocery store next week. We’re going to feel it in September, when the harvests come in short. 

Fertilizer shocks don’t register like oil shocks. Gas prices change overnight. Crop yields reveal themselves months later. But as The Conversation noted in an analysis this week, the latter may prove more destabilizing.

Air freight. 

Airspace is closed or restricted across Iran, Iraq, Israel, Qatar, Kuwait, Bahrain, and parts of the UAE, Oman, and Saudi Arabia. 

The European Aviation Safety Agency issued a bulletin advising operators not to fly over any of these countries at any altitude. 

Over 20,000 flights have been grounded since February 28. More than a million people have been stranded. Global air cargo capacity has declined by 18 percent, and the Asia-Middle East-Europe corridor, which previously handled about half of all air freight from China to Europe, has seen capacity drop by 40 percent. 

Middle Eastern carriers represent 13.6 percent of global air cargo capacity and most of their operations are offline.

This isn’t just about Amazon packages being late. Air cargo moves pharmaceuticals, electronics components, perishable goods, machine parts. 

When a cargo consultant told The Register that “globally these represent a small portion of the market,” he was talking about tech products flowing through the UAE as a distribution hub. He was not talking about the kidney dialysis supplies that move on Emirates SkyCargo, or the semiconductor precursors that go through Doha. 

The backlogs are building, warehouse capacity is straining, and every rerouted flight burns more fuel—fuel that now costs 30 percent more than it did two weeks ago.

Maritime insurance. 

This is the hidden engine of the whole crisis. Before the strikes, war-risk insurance for a single transit of the Strait of Hormuz had already risen from 0.125 percent to 0.4 percent of a ship’s insured value. For a very large crude carrier, that’s an extra quarter of a million dollars per transit. 

Then the insurers pulled coverage entirely. And without P&I coverage, ships cannot legally operate. 

It doesn’t matter if the U.S. Navy escorts you through, if you don’t have insurance, your cargo isn’t recognized at the destination port. The entire global shipping network runs on a layer of underwriting that most people never think about, and that layer just evaporated in the Gulf.

War risk surcharges of $1,500 to $3,500 per container have been imposed on everything touching the Middle East. 

MSC declared “end of voyage” on stranded shipments, which shifts responsibility, and cost, to the cargo owner. VLSFO, the fuel most container ships burn, has climbed past $650 per metric ton. Marine gasoil broke $1,000 for the first time since late 2023. 

Every one of these costs gets passed along.

The Tariff Problem on Top of the War Problem

And here’s the thing: this isn’t happening in a vacuum.

Two weeks before the bombs started falling, the Supreme Court handed down its ruling in Learning Resources v. Trump. 

Six justices, including Chief Justice Roberts, held that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. 

Roberts wrote the opinion himself, 21 pages, delivered in 10 measured minutes from the bench, and it effectively struck down the entire architecture of Trump’s reciprocal tariff regime. The country-specific levies, the China duties, the fentanyl surcharges on Canada and Mexico—all of it, gone.

Trump’s response was immediate and predictable. He called the ruling “unfortunate” and “disappointing” at the State of the Union. Then he signed a proclamation invoking Section 122 of the Trade Act of 1974, a statute that had never been used before, to impose a new 10 percent global tariff, which he promptly announced he’d raise to 15 percent (the statutory maximum). 

He directed his Trade Representative to launch “accelerated” investigations under Sections 232 and 301, covering everything from batteries to electrical grid equipment to plastics to pharmaceuticals.

Section 122 tariffs expire in 150 days unless Congress extends them. 

That’s mid-July. Right around midterm season. 

So now you’ve got a lame-duck tariff regime layered on top of the old Section 232 steel and aluminum duties, on top of the first-term Section 301 China tariffs that were never challenged, on top of pending new investigations, and all of it is feeding into a supply chain that’s simultaneously being rerouted around two closed maritime chokepoints and hit with war-risk surcharges.

FedEx has already filed suit to recover everything it paid under the illegal IEEPA tariffs. 

Senate Democrats announced legislation demanding $175 billion in refunds to businesses. 

China’s Ministry of Commerce called the ruling a vindication of its retaliatory strategy and maintained its restrictions on rare earth exports. 

Mark Zandi at Moody’s Analytics summarized the situation with unusual bluntness: “The U.S. is pulling away from the world, and the rest of the world is now pulling away from the U.S.”

The Inflation Cascade

So let’s trace the logic. You have oil prices up 50 percent. LNG prices doubled. Shipping rates up 650 percent in the spot market. Container surcharges of thousands of dollars per box. Air cargo capacity down almost a fifth globally. Fertilizer prices surging at the start of planting season. And a tariff regime that, even in its diminished post-Supreme Court form, still adds 10 to 15 percent to the cost of most imports.

Before the war, U.S. core inflation was showing signs of easing. 

The February CPI report, expected this Wednesday, is projected to show core inflation rising just 0.2 percent month-over-month. But that’s pre-war data. 

It’s already stale.

Goldman Sachs estimated that if oil stays at current levels for several months, U.S. consumer price inflation could climb from 2.4 percent in January to 3 percent by year-end. 

Capital Economics said most Asian economies would see inflation rise by half a percentage point. 

The EU, already at 2 percent, could see a full percentage point added. 

And those are the optimistic scenarios that assume the strait reopens relatively quickly.

The Federal Reserve is watching all of this. New York Fed president John Williams said the war would “obviously affect kind of a nearer-term inflation outlook.” Minneapolis Fed president Neel Kashkari, who had penciled in one rate cut this year, said the attacks made him less certain. Former Treasury Secretary Janet Yellen warned that tariffs alone could push inflation to 3 percent, and now you’re adding a war-driven energy shock on top of that.

Mortgage rates, which had been drifting lower, reversed course, back up to 6.13 percent on a 30-year fixed as of Thursday. 

The logic is simple: higher expected inflation pushes up Treasury yields, which push up mortgage rates, which push out first-time homebuyers, which keeps the housing market locked. 

Every $10 increase in oil prices adds roughly 25 cents to a gallon of gasoline. 

Delta Air Lines said in its annual filing that a 1-cent increase in jet fuel per gallon costs the company $40 million a year. 

A 10 percent increase? A billion dollars.

And then there’s China. 

February CPI came in at 1.3 percent year-over-year, the highest in three years, blowing past the 0.8 percent consensus. 

The Lunar New Year holiday helped, but gasoline prices rose 3.1 percent and gold jewelry surged 76.6 percent. 

Factory-gate prices are still deflating, but at the slowest pace since mid-2024, partly because rising crude oil is putting a floor under industrial costs. Analysts warned that a prolonged conflict could tip the global economy into stagflation—that ugly combination where prices rise but growth doesn’t. China’s property slump, America’s tariff chaos, and a Middle Eastern war walk into a bar. Nobody’s laughing.

The Political Math

An NBC News poll released this weekend showed 62 percent of voters gave negative ratings to Trump’s handling of inflation—up 7 points from last year’s already-bad 55 percent. Nearly double the 36 percent who expressed support.

U.S. employers cut 92,000 jobs in February. The war is costing an estimated $1 billion a day, according to congressional sources.

Tim Pool—Tim Pool—a MAGA-aligned YouTuber, not exactly The Economist—said: “I oppose this war. The president will pay a political price.” He added that a significant number of people regret their vote, saying this feels like the Bush administration all over again.

A week ago, Trump stood before Congress and made the case that his economic agenda was working. 

Gas prices down, stock market up, inflation slowing, mortgage rates dropping. 

Four days later, he started bombing Iran and undid almost all of it. 

His Energy Secretary went on television to say prices would come down in “weeks, certainly not months.” 

The White House floated naval escorts for tankers. Treasury issued a 30-day sanctions waiver to let Indian refiners buy Russian oil as a stopgap. The administration offered political risk insurance to tankers, though the shipping industry appears unimpressed. None of this has worked. Oil kept climbing.

The G7 finance ministers held an emergency call this morning to discuss coordinated release of strategic petroleum reserves. 

If that sounds familiar, it’s because it’s the same playbook from 2022, when Russia invaded Ukraine.

The difference is that in 2022, the Strait of Hormuz was open. The Red Sea was open. Container shipping was functioning. Air freight was flying. The global economy had shock absorbers. This time, we’re absorbing a shock that’s hitting every transmission channel simultaneously: energy, shipping, air cargo, insurance, fertilizer, financial markets, and trade policy. All at once.

I keep coming back to a phrase from a logistics consultant quoted in a trade publication last week: “One week of direct impact can easily translate into more than a month of structural disruption.” 

That’s the part that gets lost in the daily oil price ticker. 

Even if the Strait reopens tomorrow…which it won’t…you still have 147 container ships trapped in the Gulf that need to clear out. 

You have port congestion cascading through every downstream hub. 

You have carriers that declared force majeure and offloaded containers at random ports. 

You have equipment stuck in the wrong hemisphere. 

You have contracts voided and surcharges locked in and insurance premiums that won’t come down for months.

Qatar’s Energy Minister Saad al-Kaabi told the Financial Times that if the war continues, Gulf producers may be forced to halt exports entirely and that this “will bring down economies of the world.” 

He is not being dramatic. He is describing what happens when a fifth of global energy supply is removed from a system that was already running without slack.

 The LNG market had no spare capacity before the war. Container shipping was already stretched from two years of Red Sea diversions. Air cargo was operating with thin margins. Fertilizer prices were already elevated. 

The global economy didn’t have a buffer, and now it’s absorbing the worst supply shock since the 1970s.

Chatham House noted that Qatar produces 40 percent of the world’s helium, used in semiconductor manufacturing. That’s another chokepoint nobody was tracking until the drones arrived.

The war will end at some point. Wars do. But the inflationary damage is already compounding in ways that the “short-term pain” framing cannot contain. 

The farmer who can’t get urea in March doesn’t plant the same crop in April. 

The airline that’s paying a billion extra in fuel costs doesn’t un-raise its fares in June. 

The shipper who signed a war-risk surcharge doesn’t get a refund. 

The mortgage buyer who got priced out at 6.13 percent doesn’t magically come back at 5.8. These costs embed. They compound. They become the new baseline.

And the man who ordered the strikes is on Truth Social, calling it a small price to pay.

Sixty-two percent of voters disagree.

By Michael Kern for Oilprice.com

What Will Iran Do Next?

By Simon Watkins - Mar 09, 2026

• The Middle East conflict has expanded into a multi-front war involving the U.S., Israel and Iran, with missile strikes, proxy attacks and maritime disruption affecting key energy routes.
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• Donald Trump outlined goals including preventing Iran from obtaining nuclear weapons, destroying missile capabilities, pursuing regime change, and cutting support for regional proxies.
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• Iran may retaliate by targeting oil infrastructure and threatening shipping through the Strait of Hormuz and Bab-el-Mandeb Strait.
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Longstanding tensions in the Middle East are no longer simmering away -- they have tipped into a multi-theatre conflict the like of which the world has not seen in the region since the Six-Day War of 1967, with Iran at the centre of the escalation cycle. U.S. and Israeli forces are prosecuting a sustained campaign against Iranian territory, command infrastructure, and proxy assets across every active front. Iran and its network of militias are still managing to retaliate — from missile launches to maritime disruption — even as they absorb heavy losses and operational degradation. In Washington, Donald Trump has delineated four clear aims for the war against Iran, and he expects the current campaign to last around four weeks. Iran sees things differently. So the real question now is how this escalatory cycle evolves from here, and what that means for the energy markets.

Early in the conflict, Trump clearly laid out the four objectives he wants to achieve with the U.S.’s current actions against Iran and its proxies. In the order in which he said them, they started with making it impossible for Iran to build a nuclear arsenal and then moved on to degrading and destroying its missile stockpiles and production capabilities. The came regime change and finally the end of the financing and arming of its proxies. All these aims have been endorsed by every member of his cabinet. Aside from the U.S.’s war objectives, most analysts also seem to have missed that nearly all of them were in the draft of President Barack Obama’s original version of the ‘Joint Comprehensive Plan of Action’ (JCPOA, or colloquially ‘the nuclear deal’) agreed with Iran between 2013 and 2015. The exception was the explicit term ‘regime change’, although this was implied through the targeting of the key mechanisms by which the Islamic Revolutionary Guards Corps (IRGC) were able to finance itself and its proxies. The IRGC is the primary organisation charged with safeguarding the ideals of the 1979 Islamic Revolution at home and promulgating these through its proxies. And the principal mechanism through which its financing was to be stripped was by forcing Iran to agree to the terms of the Financial Action Task Force. Washington’s aim then was to neuter the IRGC in such a way before rolling it into Iran’s regular army (Artesh), as analysed in full in my latest book on the new global oil market order. The final version of the JCPOA after the long-running negotiations omitted much of the meat behind these aims before it was finalised and agreed to on 14 July 2015. All the original clauses of the deal are also fully detailed in my latest book, and it was to the original Obama version of the deal that Trump himself looked when he decided to unilaterally withdraw the U.S. from the JCPOA in 2018 as a prelude to renegotiating the JCPOA later. In essence, given that the tougher version meant the destruction of the IRGC and the Islamic regime over time, Iran was never going to agree to it, and if it did, it was never going to implement its key clauses

This is why Trump has now plainly stated that regime change is one of the four key objectives, as Iran’s Islamic leaders and IRGC have known all along, so each side knows plainly the stakes at play. Given the existential nature of this conflict now, there is little chance of any meaningful negotiated settlement between the Islamic Republic and its IRGC guardians, and the U.S. and Israel. The deaths of the former Supreme Leader, Ali Khamenei, and multiple senior commanders in the IRGC are irrelevant to the continued functioning of either the Islamic theocracy or its protectors throughout Iran, as highlighted recently by former U.S. general and director of the CIA David Petraeus. “The problem is that if hundreds of thousands of armed and organised members of the regime's security forces are still there, it is extremely difficult to take control of the country,” he highlighted in a statement last week. Specifically, he cited a well-trained and well-armed force of around one million, comprising about 200,000 each in the Basij (the IRGC-operated paramilitary volunteer militia), and the national police, and the IRGC, and around 400,000 in the Artesh. Another practical problem in changing regime in this wave of the war against Iran, he underlined, is the lack of a credible alternative leadership. The sometimes-touted (although only by the West) exiled son of the last Shah of Iran, Reza Pahlavi, is still based in the U.S. and has little genuine support in Iran itself.

Given these factors, a senior source close to the European Union’s (E.U.) security complex exclusively told OilPrice.com last week, the broad strategy of the IRGC is to keep ‘stinging’ the U.S. and Israel through multiple attacks across multiple sites until the two countries decide that they have achieved sufficient of their aims to withdraw, despite not effecting a change of regime. One such tactic in this strategy will be the continued effective closure of the key oil and liquefied natural gas (LNG) routes of the Strait of Hormuz and the Bab-el-Mandeb Strait. Although the Trump administration is rolling out a plan to secure the Strait of Hormuz -- through which up to a third of the world’s oil is transported and about a fifth of its LNG -- it does not yet have a timeline for when it will be safe for oil tankers. Only last year, the IRGC completed military preparations to close the Strait when required, through a combination of anti-ship missiles, fast attack boats, and naval mines in the Persian Gulf region, and has since conducted exercises using ‘swarm attack’ naval and aerial drone tactics, according to the E.U. source. Much of the same sort of weaponry could be used to attack shipping around the other crucial energy-transit chokepoint of the Bab-el-Mandeb Strait. This 16-mile-wide waterway flows between the west coast of Yemen on the one side -- still controlled in large part by the Iran-backed Houthis -- and the east coasts initially of Djibouti and then of Eritrea on the other, before it joins the Red Sea. It is in the lead-up to and navigation through this Strait that the real problems begin and never has the literal translation of the chokepoint’s name from Arabic – ‘The Gate of Grief’ - been more apposite than it is now.

Aside from these force-multiplier actions, Iran is also likely to ramp up attacks against U.S. allies in the region, especially Saudi Arabia, thinks the E.U. security source. Last week saw multiple drone attacks on its Ras Tanura refinery -- Saudi Arabia’s largest, with crude refining capacity of around 550,000 barrels per day (bpd). Most of the drones were intercepted, although the refinery was shut temporarily as a precaution, but this and other refineries will almost certainly be in Iran’s sites for further attacks, said the source, in an attempt to mirror the huge impact of the Houthi attacks in 2019 on Saudi Arabia’s Abqaiq and Khurais oil processing facilities, as also analysed in full in my latest book on the new global oil market order. Together at the time these two facilities represented around 50% of Saudi Arabia’s oil production at the time, or about 5% of the global oil supply. As such, the attacks caused an immediate spike of up to 20% in global oil prices and were considered one of the most strategically significant energy?infrastructure strikes ever recorded. “The attacks underlined to the IRGC how a strike on a small number of high?leverage nodes in Saudi Arabia’s system can generate outsized global consequences, and the same has been seen this time around, and in Qatar’s shutdown of the North Field following relatively minor attacks on facilities linked to it,” the E.U. source added. And he underlined that Iran’s military actions on a zero-to-nine scale of its overall capabilities have barely reached two yet.

Rising oil prices have a direct and highly damaging effect on the U.S. economy and on the political ambitions of the country’s presidents, as thoroughly detailed in my latest book on the new global oil market order. This is likely to factor into Trump’s thinking, the closer the clock ticks toward the 3 November mid-term elections. To give some broader context, according to the World Bank, a ‘small disruption’ in global oil supply – reduced by 500,000 to 2 million bpd (roughly the same as the decrease seen during the Libyan civil war in 2011) – would see the oil price initially rise 3-13%. A ‘medium disruption’ – involving a 3 million to 5 million bpd loss of supply (roughly equivalent to the Iraq war in 2003) would drive the oil price up by 21-35%. And a ‘large disruption’ – featuring a supply fall of 6 million to 8 million bpd (like the drop seen in the 1973 Oil Crisis) – would push the oil price up 56-75%.