ENERGY SECURITYWhy the Iran War Hasn’t Caused a Global Oil Crisis — Yet
When the Strait of Hormuz first closed at the start of the 2026 Iran war, the world braced for the “largest energy crisis in history.” But a little over four months into the war, little of that has come to pass. The world has found ways to adapt without crude from the Strait of Hormuz. Experts say that won’t last.
When the Strait of Hormuz first closed at the start of the 2026 Iran war, the world braced for the “largest energy crisis in history.” Before the conflict began, almost 20 percent of the world’s traded oil passed through the narrow waterway between the Persian Gulf and the Gulf of Oman. Iran’s blockade of the strait effectively erased 15 million barrels per day from circulation overnight.
Many experts and commentators predicted that the supply gap would have catastrophic consequences. Australia expected fuel rationing, the European airline industry warned of mass flight cancellations, and Goldman Sachs predicted widespread oil shortages. The International Monetary Fund warned of a potential global recession, and some traders worried that oil prices could hit $200 a barrel.
But a little over four months into the war, little of that has come to pass.
True, oil prices have gone up around the world, and there have been critical shortages of products such as cooking oil in some places, but rationing and recession have largely not arrived. Instead, a series of emergency measures have helped avoid the predicted crises: Oil exporters including the United States stepped in to fill the gap, either by drawing down strategic petroleum reserves or increasing production. Countries that were most reliant on fossil fuel imports from the Middle East took emergency conservation measures to reduce their demand.
Here’s how the world has averted the worst of the oil shock so far, and what experts say might happen next if the conflict continues to drag on.
Finding alternative sources of oil
In the months since Hormuz cut off access to Iran’s main oil supply, the world has scraped every corner to find substitute barrels of crude oil. Many countries had stockpiles of oil saved up for an emergency, and in March, the International Energy Agency coordinated a historic release of oil from those reserves. That put on the market more than 400 million barrels, enough to fill about 20 days’ worth of the supply from Hormuz.
