Iran targets the global oil market: Gulf energy and the Strait of Hormuz are under fire

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The second week of the US-Israeli war on Iran opened with a dramatic escalation when Israel struck Iran’s oil facilities¹ on 7 March and pushed the confrontation into the global oil market. Islamic Revolutionary Guard Corps (IRGC) leaders vowed retaliation against Gulf energy assets, warning that a broader regional war could push oil prices to $200 per barrel.² Acting on this warning, Tehran targeted Gulf energy infrastructure and shipping in the Strait of Hormuz, seeking to raise the costs of the war for the US and its regional partners. Given that even limited attacks in the strait can heighten risk perception and disrupt one of the world’s most critical energy corridors, a further escalation — particularly through the deployment of sea mines — could turn temporary disruption into a prolonged global energy shock.

The surge in hostilities quickly undercut Iranian President Masoud Pezeshkian’s apology to Gulf states for initially attacking them and his pledge not to target them unless provoked: The recent attacks shifted squarely onto the infrastructure that produces energy and the maritime artery that moves it.

From early in the conflict, Iran signalled that Gulf energy infrastructure was within scope. Iranian drone strikes hit Saudi Arabia’s Ras Tanura oil refinery, while attacks forced Qatar to suspend its Liquefied Natural Gas (LNG) production. Since 7 March, however, the campaign has intensified, as energy infrastructure across the Gulf has increasingly come under fire. Daily drone swarms have targeted Saudi Aramco’s Shayba oil field, while refineries and fuel storage facilities in Bahrain, the United Arab Emirates, Kuwait, and Oman have also been struck (see map below).

Yet the ultimate pressure point in Iran’s arsenal is the maritime chokepoint of the Strait of Hormuz. The strait carries around 20% of global seaborne oil and nearly 80 million tonnes of LNG annually.³ Some 84% of those flows are destined for Asian markets, such as China, India, Japan, and South Korea.⁴ Any sustained disruption would therefore extend far beyond the Middle East, pulling major Asian economies directly into the crisis. Tehran has long brandished this threat. During the June 2025 12-day war, it warned it could close the strait.⁵

This time, rhetoric swiftly gave way to action. ACLED records at least 25 Iranian attacks against shipping in the Gulf and the Strait of Hormuz since 28 February. Over 30% of these attacks occurred on 1 March — the second day of the war. The early concentration of strikes appeared designed to signal that the closure of the chokepoint is not merely rhetorical. Following a brief lull on 8 and 9 March, attacks resumed after renewed IRGC threats to block oil shipments on 10 March (see graph below).⁶

Roughly 40% of these incidents have targeted oil tankers. But halting every vessel is unnecessary. As seen during the Red Sea crisis, heightened risk perception alone can constrict trade. Insurers withdraw coverage, war-risk premiums spike, and shipowners reroute or delay sailings. Since 2 March, daily transits have fallen to fewer than 10 vessels — nearly 90% below the 2026 daily average of 84 recorded through 27 February.

A military escort of commercial vessels⁷ may be a necessary political signal to reassert freedom of navigation, and is currently being discussed by the European Union and the US. Yet escorts alone are unlikely to restore market confidence. Meanwhile, countries not directly involved in the war — including China, India, and Turkey⁸ — may negotiate safe passage through the chokepoint, thereby increasing the risk of a prolonged war of attrition. Against this backdrop, the deployment of sea mines appears unlikely at this stage, as it would represent a last-resort measure that could disrupt shipping lanes long after hostilities subside.

Visuals produced by Ana Marco.