The escalating war in the Middle East is putting renewed pressure on global energy markets, threatening oil supply routes and raising concerns about how long the industry can withstand continued disruptions, The New York Times reports.
Houthi attacks in Saudi Arabia, including a deadly strike on Riyadh’s airport, have expanded the conflict’s reach, while at least 16 vessels have been attacked this month as they attempt to navigate the Strait of Hormuz. Energy executives have warned that the region faces growing security risks, even as crude exports have partially recovered with U.S. military assistance and alternative shipping routes.
Global oil prices reached about $104 per barrel Monday, up from just under $70 before the war began in February. Although Saudi Arabia has redirected exports through its East-West Pipeline to the Red Sea and quickly repaired damage from earlier attacks, the pipeline and alternative maritime routes remain vulnerable.
Kuwait’s oil production has recovered to about 2 million barrels per day, roughly 75% of its prewar level, as more tankers risk crossing the strait. However, the additional security measures, longer routes and rising transportation costs make current export levels difficult to sustain.
Governments have attempted to stabilize markets by releasing strategic oil reserves, including a coordinated release in March, but those stockpiles are dwindling as global refining capacity struggles to meet demand. Diesel prices have reached record highs in several markets, including the U.S., adding costs for businesses dependent on transportation and freight.
Meanwhile, China is beginning to increase oil purchases again, while Iranian crude exports have largely disappeared following a U.S. naval blockade. Industry leaders expect prolonged volatility, potentially extending into 2027, as continued attacks, limited reserves and insecure shipping routes threaten global energy supplies and keep prices elevated.
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