Energy at brink: Middle East conflict sparks fears of $150 oil and global supply collapse

DOHA: The escalation of the conflict in the Middle East, involving the United States, Israel, and Iran, has triggered a severe crisis in global energy markets, raising concerns of a prolonged economic downturn. Qatar’s Minister of State for Energy Affairs, Saad al-Kaabi, has warned that a sustained conflict could drive global crude oil prices to as high as $150 per barrel, warning that such a surge could destabilise economies worldwide.

The crisis follows targeted military strikes on key energy infrastructure in the region, including Qatar's Ras Laffan facility, which is among the world's largest liquefied natural gas (LNG) export terminals. As a result, QatarEnergy has suspended production and declared force majeure, citing the need to prioritise worker safety and the impossibility of securing maritime transport through the Strait of Hormuz. The Strait serves as a vital chokepoint for approximately one-fifth of the world’s crude oil and a significant share of global LNG, and its effective closure has choked supply lines, leading to an immediate spike in international fuel prices.

Energy analysts caution that even an immediate cessation of hostilities would not provide an instant recovery, as restoring normal delivery cycles would take weeks or even months. The resulting supply constraints are expected to extend beyond energy prices, creating a domino effect across global manufacturing and construction sectors that rely on Gulf-supplied petrochemicals and fertilisers. As nations grapple with the dual threat of supply shortages and inflationary pressure, the prospect of prolonged market volatility remains a central concern for the global economy.