In a striking revelation this week, Saudi Aramco informed its international oil buyers that it remains uncertain which port will be used for its April shipments. This unprecedented ambiguity underscores a shifting reality in the global energy landscape: Iran, rather than the United States, now holds the decisive influence over reopening vital energy supply channels. The letter sent to Aramco’s clients indicated that shipments could come from either the Red Sea or the Gulf, reflecting the volatile situation as conflict intensifies across the region and Iran effectively blocks the Strait of Hormuz.
One long-standing Saudi oil purchaser expressed frustration, remarking that they might as well contact Iran directly to determine when the conflict will end so that oil deliveries can resume. This sentiment captures a growing consensus both within the Middle East and internationally—that while the United States and Israel may declare an end to hostilities at any moment, Iran’s actions will ultimately dictate how long the disruption to global energy supplies persists. The International Energy Agency has described the current turmoil as the most severe interruption to oil and gas flows in recent history.
U.S. President Donald Trump has repeatedly asserted that the United States is nearing victory in the rapidly escalating conflict, offering timelines that range from a few days to several weeks. However, Iran has responded to U.S. and Israeli military strikes by launching drones and missile attacks on vessels navigating the Strait of Hormuz. This strategic choke point is critical, as it handles roughly 20% of the world’s oil and liquefied natural gas (LNG) exports, supplying refineries, petrochemical plants, power stations, and energy-intensive industries globally. The effective closure of this route has sent shockwaves through international markets and energy security frameworks.
Industry leaders from the Middle East and their Western counterparts caution that merely receiving assurances from the U.S. about the safety of shipping lanes will not suffice to restore normal operations. Even if fighting were to cease immediately, the threat posed by Iran’s capacity to deploy low-cost, precision drones means that disruptions could continue for an extended period. Tehran’s ability to maintain pressure on maritime traffic far outlasts any formal declarations of conflict resolution by its adversaries.
In response to the crisis, President Trump has proposed deploying military escorts to safeguard vessels passing through the Strait of Hormuz and has called on allied nations to contribute warships to secure this vital waterway. Nevertheless, naval protection alone is unlikely to normalize shipping unless the U.S. and Israel negotiate terms with Iran that include a cessation of attacks or threats against commercial vessels. A senior official from the Gulf energy sector emphasized that tanker operators will remain anchored until Iran guarantees safe passage, highlighting the deep mistrust that currently hampers any swift resolution.
Experts warn that if the U.S. and Israel declare victory on conditions unacceptable to Tehran, Iran may escalate its campaign by deploying mines and drones to further disrupt maritime traffic. Neil Quilliam, an analyst at the Chatham House think tank, pointed out that Tehran’s strategic calculus involves demonstrating its resilience and refusal to concede defeat through continued asymmetric warfare tactics. This was evident when drones targeted the UAE’s oil loading terminal in Fujairah shortly after the U.S. struck military installations on Kharg Island, Iran’s principal oil export hub.
The message from Iran is clear: there is no safe haven in this conflict, and Washington will not unilaterally dictate the terms of escalation or de-escalation. Helima Croft, a former CIA analyst now with RBC Capital, highlighted the risk of proxy attacks originating from Iran-aligned groups in Yemen, Iraq, and other regions. The Houthis in Yemen, allied with Tehran, could further destabilize the energy sector by targeting Saudi Arabia’s Red Sea port of Yanbu, which currently serves as the kingdom’s only alternative oil export route amid the Gulf Strait blockade.
The ongoing crisis has severely undermined confidence in the security of supply routes and exposed vulnerabilities in the region’s energy infrastructure. An energy advisor to the Iraqi government noted that repairing damaged facilities and restoring insurance coverage for shipments will take months, with premiums rising sharply due to heightened risk perceptions. Iranian attacks have forced shutdowns at refineries across Saudi Arabia, the UAE, Bahrain, and Israel, triggering oil and gas price surges of up to 60%.
Even if the conflict were resolved swiftly, analysts from institutions including Morgan Stanley warn that market disruptions could persist for weeks. Global oil companies may hesitate to return to the Gulf promptly, delaying the restart of production fields and risking long-term damage to reservoirs. The closure of key shipping lanes has compelled producers to reduce output as they face logistical challenges in exporting their crude.
Saudi Aramco has halted production at two major offshore fields, Safaniya and Zuluf, cutting output by approximately 20%. Iraq, the region’s second-largest oil producer, has seen its production plummet by 70%, while the UAE, ranked third among OPEC producers, has experienced a 50% reduction in output. Collectively, oil output cuts across the Middle East now range between 7 and 10 million barrels per day, equating to roughly 7-10% of global demand.
Furthermore, Qatar has completely suspended its liquefied natural gas production, removing 20% of the world’s LNG supply from the market and informing customers that deliveries may not resume until May. An industry insider summed up the prevailing mindset succinctly: safety concerns are paramount, and risking lives amid such instability is simply unacceptable.
As the Gulf conflict continues to unfold, the global energy market remains precariously balanced, with Iran’s control over critical maritime chokepoints playing a pivotal role in determining when and how normalcy can be restored. The situation underscores the complex interplay between geopolitics and energy security, where military actions, diplomatic negotiations, and regional alliances collectively shape the future of global oil and gas supplies.
