The global energy landscape has been transformed in the six months since US and Israeli forces struck Iran on February 28, 2026. The conflict has cascaded through oil markets with a force that economists had modeled but markets had never fully priced in.

Brent crude now trades at roughly $90 per barrel, about 25% above its level before the first strikes landed. Because Brent serves as the pricing benchmark for roughly two-thirds of the world's physically traded crude, the move has carried through to contract prices well beyond Europe.

The Strait of Hormuz under pressure

Before the war, roughly 20% of the world's seaborne oil moved through the Strait of Hormuz, with flows on the order of 20 million barrels per day in recent years, according to US Energy Information Administration estimates. As of August 2026, tanker traffic through the chokepoint has fallen to approximately 2.2 million barrels per day, reflecting both Iranian disruption campaigns and the reluctance of commercial operators to send vessels into an active war zone. The strait is the only sea route out of the Persian Gulf, and the pipelines able to bypass it — Saudi Arabia's East-West line and the UAE's line to Fujairah — have combined capacity for only a fraction of pre-war volumes.

Iran's own exports tell an even starker story. The country's oil exports have dropped to around 250,000 barrels per day, an 85% reduction from pre-war levels. The collapse in revenue has placed severe strain on Iran's domestic economy, where annual inflation reached 66% in July 2026.

The squeeze extends beyond crude supply. Middle Eastern refining output has been cut by roughly 20% since hostilities began, while European diesel has borne the sharpest pain on the consumer side, rising more than 70% since the conflict started. Europe's diesel exposure is structural: the region has long consumed more diesel than its own refineries produce and has depended on imported barrels — from Russia before sanctions on its products took effect, and increasingly from Gulf refineries since — putting it directly in the path of Middle Eastern outages.

Strategic reserves buy time, not solutions

In the months following the February strikes, the US, coordinating with European allies, released oil from strategic petroleum reserves. The US Strategic Petroleum Reserve has now fallen to its lowest level since the 1980s, leaving a much thinner safety net in place than the one that cushioned the initial February 2026 shock. The reserve entered the war already depleted: the roughly 180 million barrels released after Russia's 2022 invasion of Ukraine had driven it to four-decade lows, and refilling had only partially advanced since.

Asia absorbs the heaviest financial blow

Developing Asia's total energy import bill is projected to reach $160 billion for 2026, a dramatic escalation from pre-war estimates. The weight lands on economies such as India and Pakistan, which import the bulk of the crude they consume — much of it produced around the Persian Gulf and routed through the same chokepoint at the center of the conflict — so higher benchmark prices translate directly into higher national import costs.