By Prof. Dr. Sultan Jassim Sultan Al-Nasrawi
As the Iran–U.S.–Israel war enters its fourth week, the global economy is facing a major economic shock (a severe energy shock). The conflict has become the most significant challenge to the energy sector since the 1970s crisis. Disruptions in maritime navigation and the closure of the Strait of Hormuz—through which about one-fifth of the world’s oil and gas supplies pass—have led to unprecedented surges in the prices of fuel, gas, and coal, with effects spreading across the entire global economy.
Oil Prices in the Context of War: A Blocked Global Artery
The tensions imposed by the war have caused a significant surge in oil prices, with Brent crude exceeding $100 per barrel due to fears of supply disruptions through the Strait of Hormuz. In addition, a risk premium of حوالي $15 has been added, with expectations that prices could reach $150–$200 if the closure of the strait continues.
However, this increase has not been uniform. The gains of U.S. West Texas Intermediate (WTI) crude have lagged behind its international counterpart, Brent crude, which has been more affected by the disruptions. The price gap between them has widened to its largest level since 2014—shortly before the U.S. approved legislation allowing crude oil exports.
Overall, oil prices have risen by about 40% since the beginning of the war.
Figure (1): Average oil prices for the period 2014 – March 2026
* The energy prices mentioned in this article are approximate and, in some cases, represent averages over the four weeks of the war.
A state of uncertainty and ambiguity continues to overshadow global oil markets, particularly in light of Iran’s denial of any negotiations to end the war. The future direction of oil prices largely depends on the duration of the conflict and its developments.
Gas Prices Amid the War: Disruption of Natural Gas Markets
Following the shock of the Russia–Ukraine war, the Iran–U.S.–Israel conflict has once again reshaped the global natural gas market. Gas has shifted from being a vital energy resource to a strategic weapon at the heart of the conflict.
With Qatar declaring force majeure on its LNG exports due to halted navigation in the Strait of Hormuz, European gas prices surged by more than 70% within days, reaching levels not seen since the 2022 crisis. Futures prices for natural gas in Europe rose to حوالي €55 per MWh, amid ongoing uncertainty بشأن the possibility of a ceasefire in the Middle East, which has kept the Strait of Hormuz closed and reduced regional gas supplies.
Meanwhile, the largest LNG facility in Qatar remains shut down, with repair estimates ranging from 3 to 5 years. Europe now faces increasing competition with Asia for LNG shipments, as it attempts to replenish its depleted gas reserves ahead of winter.
Figure (2): Average natural gas prices in Europe (TTF index) for the period 2015 – March 2026 (€/MWh)
The war with Iran has caused widespread disruption to global liquefied natural gas (LNG) prospects. High prices, damage to Qatar’s export infrastructure, and potential delays in new supplies have raised doubts about expected demand.
Before the war, analysts anticipated that global LNG supply would increase by up to 10% in 2026, reaching between 460 and 484 million metric tons, with demand expected to grow at a similar pace. However, Iran’s closure of the Strait of Hormuz—through which about 20% of global LNG flows pass—combined with damage to Qatar’s liquefaction units, has taken 12.8 million tons of annual production offline for 3–5 years. According to S&P Global Platts, exports from Qatar and the UAE are expected to drop by 33 million tons this year, with supply forecasts reduced by approximately 19 million tons per year from 2027 to 2029 due to delays in the expansion of Qatar’s North Field and ADNOC’s Ruwais LNG projects, which are still under construction.
Coal Prices and the War: A Return to Pollution-Heavy Paths
At a time when the world was rapidly transitioning toward green and renewable energy, the war has restored coal’s position as a strategic energy fallback. With the Strait of Hormuz blocked and LNG flows disrupted, coal is no longer just a polluting fuel—it has become a strategic safeguard for major economies seeking to avoid widespread power shortages.
The war has driven coal prices up by over 20%, stabilizing around $140 per metric ton, directly reflecting natural gas shortages for power generation.
Figure (3): Coal prices, 2015 – March 2026 (USD/metric ton)
Other types of coal have also seen price surges. Coking coal reached between $210–240 per ton, while Asian coal (from Australia and Indonesia) increased due to rising demand from China and India.
Although coal is currently less volatile, it tends to be more expensive in the long term due to transportation and shipping costs.
Aircraft Fuel Prices During the War: A Surge in Costs
As the global aviation sector anticipated record growth in spring 2026, the war triggered an unprecedented fuel price shock. With the Strait of Hormuz becoming a direct conflict zone, jet fuel prices soared, driven by fears of disruption at major Gulf refineries and interruptions in critical supply chains. Jet fuel prices are closely linked to global oil prices, amplifying the impact of the conflict.
Figure (4): Average aircraft fuel prices, USD/barrel, 2016 – 2026 estimates
The prices of aviation fuel were heavily affected by military operations, with the price of a barrel of jet fuel jumping by about 90%, reaching approximately $175 within a few days, according to data from the International Air Transport Association (IATA).
War and Ship Fuel Prices: Disrupted Shipping
The war has placed the maritime shipping sector under a fuel shock not seen in decades.
- With the direct threat to the Strait of Hormuz and attacks on oil tankers, the problem went beyond supply shortages to include a sharp rise in operating costs.
- Prices for high-sulfur fuel oil (HSFO) and very low-sulfur fuel oil (VLSFO) surged to record levels, pushing shipping costs to unprecedented heights.
- The risks of passing through the strait forced ships to reroute to distant ports such as Singapore and East Asia, which increased fuel demand and added pressure on prices.
Figure (5): Ship fuel prices, metric ton/USD, 2016 – estimated 2026
Ethylene Prices Amid the War: Disruption of Plastic Plants
The surge in oil and gas prices during the war triggered a silent crisis affecting the world’s most important raw material: ethylene. In March 2026, production costs experienced historic jumps, placing the global petrochemical industry at a critical crossroads.
- Ethylene, which is used in the production of everything from packaging to car parts and detergents, faced double pressure.
- Supplies of raw materials such as naphtha, essential for ethylene production, were disrupted across large parts of Asia and Europe, leading to supply bottlenecks.
Figure (6): Ethylene prices, 2020 – projected 2026
Gasoline Prices: A Crisis Threatening the Return of Inflation
Car gasoline prices have turned into a nightmare threatening consumers’ purchasing power, having soared to historic record levels not seen for decades. This surge is driven by:
- Sudden interruptions in crude supply
- Shutdown of major refineries in the conflict zone
Statistics indicate that over 85 countries worldwide have been affected by the rising gasoline prices.
Table (7): Car gasoline prices in the United States and Europe
Gasoline prices in the United States jumped by about 38% compared to pre-war levels, while in Europe, prices surged by more than 42%. In the United States, prices continue to rise daily by 5–10 cents per day, prompting the Trump administration to release strategic reserves to stabilize the market.
Hydrogen Prices Amid the War: A Victim of Rising Gas Costs
In recent years, hydrogen has emerged as a major energy source in the fight against climate change, aiming to reduce emissions and mitigate negative environmental impacts. It represents:
- A pillar for clean and sustainable energy
- A competitive energy option and a global solution toward achieving net-zero carbon
- A versatile fuel source for energy conversion, storage, and transfer
Hydrogen is a key component of the circular carbon economy, accelerating the transition to cleaner and more sustainable fuels. Its uses include:
- Fuel for vehicles
- Electricity generation and heat production
- A raw material and fundamental unit in chemical products such as:
- Ammonia (a primary input in fertilizers)
- Methanol (used in plastics production)
There are different types of hydrogen, including gray, green, and blue hydrogen.
Figure (8): Average hydrogen prices — gray, blue, and green — from 2020 to projected 2026
Hydrogen is not directly linked to global oil prices but is closely tied to natural gas and energy costs. With gas prices rising due to the war’s repercussions, the cost of hydrogen production has also increased.
Currently, the war’s impact is clearly reflected on gray and blue hydrogen, whereas the increase in green hydrogen prices is mainly related to the high costs of renewable energy projects associated with its production.
Uranium Prices: Strategic Alternative Under Conflict Pressure
Amid the successive disruptions in natural gas supplies and surging coal prices during the war, strategic metals markets were not spared from the shock. Uranium prices have reached record levels, rising by approximately 31% compared to March 2025.
By early 2026, uranium prices reached around $100 per pound, with some forecasts suggesting they could climb to $130 per pound if the conflict continues. This increase is driven by:
- The gas supply crisis
- Rising demand for nuclear energy due to geopolitical tensions worldwide
Figure (9): Average uranium prices from 2020 — projected 2026 (USD per pound)
The war has reinforced the global belief that nuclear energy is the most resilient source against supply chain disruptions in the Gulf. The continuation of the conflict may push the world toward building small modular reactors as a national alternative to imported fuel, representing today a stable energy source in an unstable world.
In conclusion, the ongoing war between Iran on one side and the United States and Israel on the other is not merely a geopolitical crisis—it has created a shock in global energy markets that could redraw the energy map in the near future. The closure of the Strait of Hormuz caused unprecedented spikes in prices, particularly for oil and gas, and the stability of the global economy and energy prices remains dependent on the success of diplomacy in reducing tensions, halting the conflict, and returning to the negotiation table.
