The U.S.-Israel attacks on Iran threaten global fuel trade

With Iran targeting U.S. bases in other countries in the West Asian region, the U.S.-Israel attack has created a massive ripple effect extending well beyond the region, threatening global energy security.

With Iran targeting U.S. bases in other countries in the West Asian region, the U.S.-Israel attack has created a massive ripple effect extending well beyond the region, threatening global energy security.

Following a drone attack from Iran on Monday, Qatar halted the production of liquefied natural gas at the world’s largest export facility. The suspension of operations across refineries in other Gulf nations such as Saudi Arabia and Iraq have also been announced. Oil and gas prices have surged following the closure of the Strait of Hormuz, a gateway to 20% of the world’s oil exports from the Gulf.

As shown in the chart below, oil prices soared to $78.31 on Monday, almost 12% higher than a week ago. Prices were slowly inching up last week even as negotiations between the U.S. and Iran were ongoing, largely due to the military build-up by the U.S. in the region.

According to the Iranian Red Crescent, the U.S.-Israeli attacks, dubbed Operation Epic Fury by the U.S.’s Pentagon, have killed more than 780 people in Iran as of March 2, hitting more than 500 locations since February 28. In retaliation, Iran fired missiles at Israel and nations across the region, particularly targeting U.S. bases in Qatar, the UAE, Saudi Arabia, Kuwait, Bahrain, and Jordan, pushing what was claimed to be a “pre-emptive strike” by the U.S. and Israel into an all-out regional war.

This region accounts for 31% of the global oil production in 2024, and includes five of the top 10 oil-producing countries — Saudi Arabia, the UAE, Iraq, Iran, and Kuwait. West Asia accounted for 38% of global oil exports in 2024.

Moreover, Iran’s Islamic Revolutionary Guard Corps have announced the closure of the Strait of Hormuz which is a narrow channel connecting major oil-producing nations with the Gulf of Oman and the Arabian Sea. Ships transporting oil have been effectively halted through threats, mine-laying, and direct attacks by Iran’s military, creating a chokepoint.