Global oil markets brace for disruption as tensions escalate in the Gulf
Iran’s parliament on Sunday voted to shut down the Strait of Hormuz, a key maritime artery for global oil and gas shipments, in response to U.S. airstrikes that targeted three of the country’s nuclear facilities over the weekend.
The dramatic move comes less than 24 hours after U.S. warplanes struck Iran’s most sensitive nuclear sites—Fordow, Natanz, and Isfahan—in a surprise military operation dubbed “Operation Midnight Hammer.” The strikes, carried out late Saturday, were confirmed by U.S. President Donald Trump, who called the mission “a spectacular military success.”
While the final authority to close the Strait lies with Iran’s Supreme National Security Council, the symbolic vote from lawmakers signals Tehran’s willingness to escalate in retaliation. The Iranian government also declared that the attacks would carry “everlasting consequences,” although they stated that initial assessments showed no nuclear contamination at the targeted sites.
The Strait of Hormuz is one of the world’s most strategic chokepoints, with nearly 20% of global oil and a third of liquefied natural gas passing through its narrow waters. Analysts now warn that any attempt to disrupt traffic in the strait, whether through naval blockades, missile threats, or underwater mines, could trigger a global energy crisis and plunge the world into recession.
“The US has amassed a massive military presence in the Gulf and surrounding region, and a move by Iran against the strait would almost certainly trigger a significant military response,” Eurasia Group said in a note to clients on Sunday.
Ashley Kelty, an oil and gas analyst at Panmure Liberum, said the fallout could be even broader. “If Tehran blocks the strait, it won’t just be punishing the West—it will be hurting its regional neighbors like Saudi Arabia, Kuwait, Bahrain, Qatar, and the UAE, whose oil exports also depend on the passage,” Kelty noted.
Markets had initially calmed on Friday after President Trump suggested that Iran would be given two weeks to return to the negotiating table. Oil prices settled at around $77 per barrel. But with rising geopolitical tensions, analysts are now forecasting sharp increases.
“Above $80 now looks very plausible,” said Bjarne Schieldrop, Chief Commodities Analyst at SEB Research. “If the strait is blockaded or oil infrastructure in the Gulf is targeted, we could be looking at $100 per barrel or more.”
The U.S. strike follows escalating tensions in the region and marks the 10th day since direct conflict erupted. President Trump said the goal was to eliminate Iran’s nuclear capabilities and neutralize what he called “the number one state sponsor of terrorism.”
In a social media post, Trump said: “All planes are now outside of Iran’s airspace. A full payload of bombs was dropped on Fordow. All planes are safely on their way home.” He praised the U.S. military and declared: “Now is the time for peace.”
Despite initial claims by the International Atomic Energy Agency (IAEA) that Iran could produce up to nine nuclear warheads, the agency has since walked back that statement, citing a lack of concrete evidence.
Trump doubled down on his position in a televised address: “Iran must now make peace or face far greater consequences than what has already occurred.”
As global leaders scramble to de-escalate, the world watches anxiously to see whether Iran will act on the parliamentary vote—and what that will mean for the fragile energy markets and regional stability.
