Global Energy Markets Disrupted Amid US-Israel Conflict with Iran

The ongoing US-Israel conflict with Iran has significantly disrupted global energy markets, leading to a surge in oil prices and prompting nations to adopt various strategies to mitigate the impact.

Iran's effective closure of the Strait of Hormuz, a critical shipping lane through which approximately 20% of the world's oil passes, has severely restricted tanker traffic. This action has contributed to Brent crude prices rising above $100 per barrel, marking a nearly 45% increase since late February.

In response, countries like India have resumed purchasing Russian oil to cushion the short-term supply shock. However, energy experts caution that this is a temporary measure, as logistical and refinery constraints limit the rapid redirection of oil supplies.

Governments are also implementing fuel rationing to manage the crisis. For instance, Sri Lanka has introduced a QR code-based system to regulate petrol and diesel distribution, while Bangladesh imposed daily limits on fuel sales, though these were later suspended due to sufficient reserves.

Alternative shipping routes are being explored to bypass the Strait of Hormuz. Iraq has proposed exporting crude from Kirkuk via a pipeline to Ceyhan in Turkey, but negotiations with Kurdish authorities have stalled.

Additionally, nations such as Bangladesh, Pakistan, Vietnam, and Thailand have implemented remote working policies for government employees and encouraged similar measures in the private sector to reduce fuel consumption.

Despite these efforts, analysts express skepticism about the long-term effectiveness of these strategies, emphasizing that the Middle East remains the world's primary oil and gas supplier.