Escalating tensions involving Iran, the United States and Israel have rattled global markets. Oil prices climbed to about $85 a barrel in the five days since the latest round of attacks began, though some analysts warn that a broader conflict — particularly if Iran follows through on threats to block the Strait of Hormuz — could trigger more severe disruptions in energy markets.

Hojjatollah Ghanimifard, the former OPEC oil studies chief, told Shana that geopolitical risk in the Persian Gulf is not new and has shaped markets for roughly five decades. The key question, he said, is whether the current tensions will keep oil prices elevated — and for how long.

“We are clearly in a phase of heightened geopolitical risk,” he said. “But whether this leads to sustained price increases depends not only on Iran, but also on the actions of those threatening it, including countries directly involved in military operations or hosting facilities used in the attacks.”

More than 20 million barrels of crude oil per day pass through the Strait of Hormuz, supplying markets in Asia, Europe and beyond. A prolonged shutdown would halt not only crude exports but also shipments of petroleum products and liquefied natural gas, he said, putting upward pressure on prices.

Although oil prices initially surged, they later eased somewhat, though not to pre-conflict levels. Any sustained increase, he said, would depend directly on the duration of any closure. Countries most dependent on Gulf supplies would face the greatest economic strain.

OPEC and OPEC+ Capacity

Much of the crude exported by OPEC members and their allies in the OPEC+ transits the Strait of Hormuz. Even if the group raises output, a closure would prevent much of that additional supply from reaching global markets.

At a meeting Sunday, eight OPEC+ members agreed to proceed with a planned production increase starting in April. However, most of that additional output would come from Gulf producers, whose exports also rely on the strait. While Saudi Arabia has limited alternative export routes via the Red Sea and pipelines, the overall capacity to offset a major disruption remains uncertain.

Russia, the largest exporter outside OPEC, also faces constraints because of Western sanctions, further limiting the group’s flexibility.

Ultimately, Ghanimifard said, market stability will hinge not only on OPEC decisions but also on whether the United States and Israel continue their military operations.

Impact on China, India and Inflation

Ghanimifard suggested that higher oil prices could weigh more heavily on China than on India. While China may avoid a physical supply shortage, sustained higher prices could slow its economic growth.

India, he said, has worked to diversify its crude imports and may be better positioned to manage price volatility by drawing on alternative suppliers and adjusting regional partnerships.

A sharp rise in oil prices would likely feed into global inflation, increasing energy costs for major consumers and adding pressure on policymakers worldwide.

Investment Effects

Historically, periods of sustained high oil prices have prompted major companies to invest in new fields that are uneconomical at lower prices. Projects in countries such as Argentina and Venezuela illustrate the potential for supply growth if prices remain elevated.

In the past, oil prices above $130 to $140 per barrel helped spur the expansion of U.S. shale production. Once output stabilized and costs fell, prices retreated. The pattern suggests that extended price spikes can encourage new supply, eventually moderating markets.

Today’s environment differs somewhat, he said, because many oil-consuming countries are accelerating investments in renewable energy, including wind and solar, reducing long-term dependence on fossil fuels.

Still, he cautioned that if prices climb sharply, it may reflect not only disruptions in the Strait of Hormuz but also renewed incentives for high-cost oil and gas development worldwide.

He concluded by expressing condolences over the recent loss of Iran’s leader, calling it a significant loss for supporters while describing it as a source of honor for his followers.