AI-generated illustration, for illustrative purposes.
The presumed killing of Iran’s Supreme Leader Ali Khamenei in a joint US-Israeli operation has pushed global energy markets into extreme turbulence. The event, which occurred in late February, highlights the persistent vulnerability of strategic energy corridors, particularly around the Strait of Hormuz, through which approximately 20% to 23% of the world’s oil and a significant share of liquefied natural gas (LNG) pass.
The Strait of Hormuz remains the most critical chokepoint in the energy world. Each day, between 21 million and 22 million barrels of oil and approximately 291 million cubic meters of LNG pass through it, representing a vital share of supplies bound for Asia, Europe and other regions. Any prolonged disruption in this narrow area—only 54 kilometers across at its widest point and narrowing to 2.4 kilometers in shipping channels—has immediate consequences for prices and supply chains. Closure scenarios, even partial ones, force shippers to reroute via the Cape of Good Hope, extending journeys by 10 to 35 days depending on origin and significantly increasing fuel and insurance costs.
Iran, with the world’s fourth-largest oil reserves at 158.4 billion barrels and second-largest natural gas reserves at 34 trillion cubic meters, has already seen production affected by years of international sanctions. Before 2018, the country produced approximately 3.8 million barrels per day; current levels fluctuate between 2.5 million and 3.2 million. Prolonged political instability, exacerbated by an uncertain power transition through the Assembly of Experts, risks worsening chronic underinvestment and causing technical decline beyond the natural reservoir depletion rate. The South Pars/North Dome field, shared with Qatar and the world’s largest gas deposit at 24 trillion cubic meters, illustrates both the region’s potential and its fragility.
The repercussions extend far beyond Iran’s borders. Qatar, a global LNG leader producing 77 million to 82.6 million tonnes annually, depends indirectly on the strait’s stability for exports. The United Arab Emirates, through Fujairah port and expanding gas production, and Saudi Arabia, through infrastructure redirecting flows toward the Red Sea at the Yanbu complex, are seeking to diversify routes. Yet these alternatives remain limited in the face of a systemic crisis.
Importing countries are bearing the full impact of these tensions. Turkey, which imports 18.6 million cubic meters of Iranian gas per day, could see its LNG requirements climb to 5.3 million tonnes annually in the event of a cutoff. Egypt, with daily consumption of 175 million to 185 million cubic meters and domestic production from the Zohr field, remains exposed. China, the main buyer of Iranian crude, could activate clauses in long-term contracts or turn to other suppliers, adding pressure to spot markets.
Energy analysts emphasize markets’ relative resilience thanks to IEA-coordinated strategic reserves of 1.5 billion barrels, US shale production and the expansion of global LNG. However, a scenario involving simultaneous shutdowns at several facilities would exceed historical precedents—the 1973 embargo, the 1979 Iranian revolution, the 1990 Gulf War and the 2019 attacks in Saudi Arabia—in intensity and duration.
Geopolitically, the crisis is accelerating the reconfiguration of energy alliances. Europe continues diversifying away from Russian gas, North America is consolidating its role as a net exporter, and Middle Eastern producers are reassessing partnerships. Over the longer term, disruptions encourage investment in renewables, batteries, hydrogen and nuclear power, as well as technologies such as floating LNG terminals to strengthen resilience.
Commodity market participants are being urged to adopt sophisticated risk management, balancing proactive hedging against the cost of overprotection. Indicators to watch include insurance premiums, which can rise from 0.5% to 8%, options volatility, the structure of futures price curves and satellite tracking of tanker movements.
As potential successors to Khamenei emerge and regional tensions persist, the Persian Gulf’s strategic energy corridor remains the most reliable barometer of global stability. The coming months will show whether the crisis marks a turning point toward an accelerated energy transition or prolongs an era of lasting geopolitical volatility for global energy supplies.