Iran’s Move Holds the Key to Restoring Global Oil Flow

Saudi Aramco recently informed its buyers that it was unsure which port would handle April shipments. The revelation underscored a new reality: Iran, not the United States, can dictate when the global oil market reopens.

• A Saudi buyer joked that he would call Iran to find out when the war ends so he could secure his oil.
• The comment reflects a growing belief that even if Washington and Israel declare victory, Iran can keep the conflict alive.

The Strait of Hormuz: A Critical Bottleneck

• Roughly 20 % of global oil and gas flows through the Strait of Hormuz.
• Iran’s drones and missiles have repeatedly blocked shipping lanes, causing widespread disruption.

Middle‑East firms argue that a simple peace declaration is insufficient to resume shipping. Tehran can still deploy low‑cost drones to obstruct routes for months after active hostilities cease.

U.S. Response and Its Limitations

• The United States has offered military escorts and urged allies to safeguard the strait.
• Experts contend this will fail unless Iran stops threatening vessels.
• Should Washington and Israel win on terms Iran rejects, the Iranian side may intensify disruptions.

Recent Escalations

• Drones struck an oil loading hub in the UAE following U.S. strikes on Iran’s main export terminal, illustrating that no safe harbor exists under current conditions.
• Yemen’s Iran‑backed Houthis could target Saudi Arabia’s sole alternative export port, further straining the energy sector and global economy.

Economic Fallout

• Shipping insurance premiums have risen sharply due to heightened risk.
• Refineries in Saudi Arabia, the UAE, Bahrain, and Israel have shut down, driving oil prices up by as much as 60 %.
• Even if hostilities cease quickly, markets will feel the shock for weeks.

Production Declines

Total Middle‑East cuts now reach 7–10 million barrels per day (about 7–10 % of global demand). Qatar halted LNG production, removing 20 % from world supplies and warned that cargoes may not arrive until May.

“We cannot risk lives,” an industry source said, highlighting safety as the paramount reason for these shutdowns.