Iran Conflict Forces Gulf Nations to Rethink Energy Export Routes

Iran, Mar 07 : The escalating conflict in the Middle East is raising concerns about a potential global energy crisis as major oil and gas exporters search for alternative routes to move supplies out of the Gulf.

Shipping disruptions around the strategic Strait of Hormuz  a key passage for global oil trade have forced tanker operators to redirect cargo toward the Red Sea. The situation has also led several refineries across the region to reduce production following drone and missile attacks.

Tankers diverted as shipping risks rise

With traffic through Hormuz significantly disrupted, Saudi Arabia has increased crude shipments from its Red Sea port at Yanbu Port. Ship-tracking data indicates that seven very large crude carriers have already been loaded at the port this month, each capable of transporting about two million barrels of oil.

Some of these tankers are heading toward Asian markets such as Malaysia, while others are moving north toward Egypt to connect with the SUMED Pipeline, where additional storage facilities are available.

However, the alternative routes also pass through sensitive maritime zones like the Bab el‑Mandeb Strait, an area previously threatened by attacks from Yemen’s Houthi movement.

Regional producers face storage pressure

The slowdown in tanker traffic has caused storage facilities across the Gulf to fill up quickly. Several producers have already begun reducing output as they struggle to move crude to international markets.

Iraq has started shutting down some of its largest oil fields due to export bottlenecks, while Kuwait has reportedly reduced production after reaching storage capacity limits. Energy exporters such as Qatar have also warned that shipments could be halted entirely if the conflict continues.

Analysts say the closure of Hormuz  through which roughly one-fifth of the world’s oil supply normally passes  could trigger production cuts across the region if the situation persists.

Oil prices surge amid uncertainty

The conflict has already pushed global energy prices higher. Benchmark Brent crude recently climbed above $90 per barrel for the first time in nearly two years, while US oil futures also approached similar levels.

Meanwhile, Donald Trump, the President of the United States, has signaled possible measures to stabilise energy markets. Authorities have also eased restrictions on India importing Russian oil to help offset supply disruptions.

Refineries across region affected

Several refining facilities in the Gulf have also been impacted by attacks or operational disruptions. Bahrain reported damage at its main refinery, while major plants in Saudi Arabia and Kuwait have reduced capacity. Qatar has temporarily halted refining operations along with parts of its large liquefied natural gas sector.

The ripple effects are being felt globally. In China, authorities have instructed major refiners to suspend exports of diesel and gasoline as crude deliveries face delays.

Energy analysts warn that if the conflict continues and the Strait of Hormuz remains closed, global oil prices could surge further and deepen pressure on energy markets worldwide.