The 2026 Iran war, including the closure of the Strait of Hormuz in March 2026, has led to possibly the largest ever supply disruption in the global oil market. The impacts of the conflict include acute supply shortages and rises in the cost of fuel, leading to inflation, and heightened risks of stagflation and recession. The war has precipitated a major energy crisis and subsequently economic crisis for Europe, primarily through the suspension of Qatari liquefied natural gas (LNG) and the closure of the Strait of Hormuz. The rest of the world has been affected by panic buying and severe disruption to the distribution of petroleum, diesel, and LNG, and urea for fertiliser. Much of the world's supply of these are sourced from the Middle East and/or transits the Straits of Hormuz, the latter blockaded by Iran in early March 2026. As of April 2026 there are ongoing concerns about energy security and as well as food security, related to fertiliser shortages and costs.
The 2026 Iran war caused immediate volatility in energy markets, with Brent crude oil prices surging 10âÂÂ13% to around $80âÂÂ82 per barrel by 2 March 2026. The conflict has caused the restriction of nearly all traffic through the Strait of Hormuz, leading to what the International Energy Agency has characterised as the "largest supply disruption in the history of the global oil market". The head of the IEA described the situation caused by the war as the "greatest global energy security challenge in history".
Iran's closure of the Strait of Hormuz disrupted 20% of global oil supplies and significant liquefied natural gas (LNG) volumes. Analysts have forecast that prices could reach $100 per barrel if disruptions persisted, potentially adding 0.8% to global inflation.
Exports from the region have been typically going to Asian countries, with China, India, Japan, and South Korea accounting for 75% of oil and 59% of LNG exports. However, Singapore and Taiwan depend more on Qatari LNG, while Pakistan and Bangladesh are more price sensitive.
QatarEnergy announced on 3 March that it was declaring Force Majeure on its contracts with buyers, and internal sources, according to Reuters, said that it would soon be shutting down gas liquefication, as LNG tankers could not leave the Gulf, and that restarting it would take weeks. These announcements caused increases in world gas prices, which analysts said was a part of the Iranian Government's plan to apply pressure on the world to stop the war. On 6 March, Qatar warned that if the war continues, other Gulf energy producers may be forced to halt exports and declare Force Majeure. Also on 6 March, it was reported that according to satellite imagery analysis by both Bloomberg and the Energy Economics and Society Research Institute in Tokyo, that Ras Laffan, the main gas facility in Qatar, appears not to have been damaged before the "unprecedented shutdown" which sent fuel prices higher. The United States, buffered by domestic production, faced less direct impact but saw gasoline prices rise 5-10 cents per gallon daily.
On 18 March, Iran hit Qatar's inactive Ras Laffan Industrial City LNG complex, causing a 17% reduction in Qatar's LNG production capacity. The damages from this attack would take 3-5 years to fix. Consequently, LNG spot prices in Asia increased by over 140â¯%.
The impacts of the conflict are similar to the 1970s energy crisis, including acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession.
Countries such as Australia and India have more sufficient reserves but face challenges with panic buying. Economies most reliant on the strait for energy imports are in Asia, with Europe also viewing the strait as vital for its energy security. The initial disruption of petroleum is expected to affect Asia the most, but Europe is likely to be hit hard in the medium-to-long term, and the UK is expected to be the worst hit major economy.
The British think tank The Food Policy Institute has warned of long-term increases in food prices due to disruption in fuel and fertiliser markets. The Strait of Hormuz is central to the global fertiliser trade. Over 30 per cent of global urea, which is widely used and produced from natural gas â is exported from Gulf countries through the Strait. Much of the cost of producing some foods, including corn and wheat, is in the cost of fertiliser, and this cost, along with rising energy costs, makes basic food production very expensive. Much of the Gulf states' food is imported - for example, over 90 per cent in Qatar. These factors have led to fears of food insecurity not only in Gulf states, but around the world.
As of 28 March, analysts fear that another hard oil crisis is unfolding that is expected to be very decisive to the global economy.
The war has precipitated a second major energy crisis and subsequently economic crisis for Europe, primarily through the suspension of Qatari liquefied natural gas (LNG) and the closure of the Strait of Hormuz. The conflict coincided with historically low European gas storage levelsâÂÂestimated at just 30% capacity following a harsh 2025âÂÂ2026 winterâÂÂcausing Dutch TTF gas benchmarks to nearly double to over â¬60/MWh by mid-March. On 26 March, the European Commission advised its member states to fill their gas storages early to avoid price spikes later in the year.
European natural gas prices nearly doubled after, on 2 March, the Qatari Ministry of Defense announced that two Iranian drones attacked Qatari gas facilities, followed closely by an announcement from QatarEnergy that all gas production in the country has been halted. This raised concerns over energy security and fertiliser costs. EU natural gas prices decreased again to a less-high â¬48/MWh on Wednesday 4 March.
Shipping disruption contributed to volatility in UK energy markets, with analysts warning that wholesale gas price increases could raise household energy bills and expose the country's reliance on global fuel markets. The situation also renewed political debate over the role of domestic production in the North Sea, including potential reforms to the UK's Energy Profits Levy (windfall tax) on oil and gas producers and the future of investment in the sector. However, analysts noted that additional drilling in the North Sea would be unlikely to significantly reduce UK energy bills in the short term, as most oil and gas produced there is sold on international markets at global prices.
The Iran conflict also bolstered the necessity for renewable energy, as solar and wind power can reduce vulnerability to external supply and decentralised power generation that offers greater autonomy from global energy markets. With fluctuating oil prices, renewable energy has become significantly more cost-competitive. Shell plc's CEO warned that Europe could face shortages of fuel by April. British supermarket chain Asda warned that it was already facing shortages of fuel at their fuel stations.
Fuel prices at the petrol and diesel stations started soaring in early March in Australia, partly driven by panic buying. More critical to overall inflationary forces though, is the supply of diesel to drive heavy machinery. Australia's diesel is largely dependent on refineries in South Korea, Japan, and Singapore. Experts have warned that the increased price of diesel would lead to much higher food prices, threatening both food security and the "just-in-time" logistics infrastructure that serves food retailers. Australia holds around 29 to 36 days' reserves of fuel, and a large proportion of this was released to support retailers in regional areas. If Hormuz continues to be blocked, the Liquid Fuel Emergency Act 1984 could be triggered, which allow for formal transaction limits and rationing of fuel. This act was passed in response to the 1970s fuel crisis, and has not been triggered since then.
In mid-March, the state governments of Victoria and Tasmania made public transport free to all users, for differing fixed time periods. On 30 March 2026 the Australian Government under Prime Minister Anthony Albanese, after a meeting of National Cabinet, announced a National Fuel Security Plan, to coordinate responses across all states and territories of Australia. The four-stage plan specifies roles and responsibilities of governments and industry partners. At this point, the country was at level two, dubbed "Keeping Australia moving", after going through a preparation and planning phase. The federal government announced the cutting of fuel excise by 50%, along with a three-month pause on road user charges for trucks.
Singapore and Australia have signed an agreement to keep their energy trade flowing, with Singapore diversifying the origins of its supplies of crude oil.
On 12 March the New Zealand Government released six days' worth of petroleum following a global directive by the International Energy Agency to release 400 million barrels of petrol in response to supply disruptions caused by the 2026 Iran war.
On 24 March the New Zealand Government announced that about 143,000 working families with children would receive a $50 tax credit to help with rising fuel costs from 7 April. Another 14,000 families were also expected to be eligible for a lower tax credit.
On 27 March the New Zealand Government released its four-level fuel alert level system in response to fuel shortages caused by the Iran conflict. That day the country was placed on the first phase, watchful, with the public advised to use fuel cautiously.
Most governments of Pacific nations in Oceania, such as Samoa, Fiji, Vanuatu, and Papua New Guinea, had said publicly by the end of March that they have enough fuel to keep going for a few months; however, privately, some officials have expressed concerns about the future if oil deliveries to the region are halted owing to the war, and prices have gone up in all of these countries as well as Solomon Islands, Tonga, and Marshall Islands. Australian Foreign Minister Penny Wong and Minister for Pacific Island Affairs Pat Conroy have signalled their willingness to ensure that regional neighbours do not run out of fuel. The New Zealand Government is similarly doing what it can to help, particularly Polynesian nations.
All Asian countries have been affected by the shortage of LNG.
East Asian countries maintain relatively high reserves of oil, with Japan holding enough for 254 days, Korea 208 days, and China 120 days.
The crisis has not had a dramatic impact on the lives of most South Koreans, and energy minister Kim Sung-hwan has said that the country would not experience problems with supply for over a year. However, the Korean Government launched an energy-saving campaign, encouraging its citizens to have brief showers, and limit their use of washing machines, and it has postponed the decommissioning of coal-fired power plants as well as reducing the limit on electricity made from coal.
Bangladesh relies on coal for much of its power, and has ramped up power generation from coal as well as importing more power created from coal. Universities were closed in advance for the upcoming Eid al-Fitr holidays in order to conserve electricity and fuel. All shopping centres and commercial establishments have also been directed to shut down by 8.00 pm.
India is home to the world's largest population, and has been significantly affected by the fuel crisis. People are queuing for gas and petrol. It imports around 60 per cent of its LPG, most of which comes through Hormuz. It uses coal for nearly 75% of its power and has increased its power generation from coal.
In Gujarat state, the gas shortage has led to its ceramics industry shutting down. In Mumbai, many hotels and restaurants shut down fully or partially in early March, due to the lack of cooking gas.
Sri Lanka has introduced a four-day working week. In addition, there are long queues for petrol, causing people to miss out on work.
Southeast Asia is very reliant on imported oil and gas, with most of it travelling via the Strait of Hormuz. In 2024, around 84 per cent of the crude oil and 83 per cent of LNG passing through the Strait went to Asia; nearly 70 per cent of the oil went to China, India, Japan, and South Korea, while around 15 per cent went to the rest of Asia. Crude oil shortages particularly affect The Philippines, Thailand, Malaysia, and Brunei. In general, countries in the southeast Asia region hold less in reserve than east Asia. Another problem is the very limited refining capacity, particularly in Laos, Cambodia, and Myanmar, meaning that these countries rely on products imported from Thailand, Vietnam, and Singapore.
Governments and businesses across southeast Asia have been imposing measures to reduce the impact of the fuel crisis, which is severe in this region. In Thailand and Vietnam, government officials are encouraged to work from home and limit travel, and Vietnam, along with Thailand, are introducing fuel subsidies. Myanmar has imposed alternating driving days.
Indonesia, although an oil producer itself, imports around a third of its supply. The largest economy in the region, it keeps a fuel reserve of around 22 days.
Myanmar, which has experienced civil war since 2021, has restricted private vehicle use to alternate days, and there are long queues at petrol stations. The country is lacking in refineries, and it relies on oil products imported from Thailand, Vietnam, and Singapore.
The Philippines declared a state of emergency on 24 March due to a concurrent strike by transport workers, and government offices in the Philippines are working only four days per week.
Singapore is an important hub for the passage of oil; it receives crude oil, mostly from the Middle East, and its refineries (most of which are on the Jurong Island) produce the products which are then exported around the Asia-Pacific region, processing up to 1.5 million barrels of crude per day. Singapore and Australia made an agreement to keep their energy trade flowing, and Singapore economic officials have said that the country's refineries are maintaining stable operations and drawing on diverse supplies of crude oil.
The government has directed people to raise their air-conditioning temperatures and reduce their outer clothing, to reduce energy consumption, and employees of all government agencies are working from home.
Vietnam's government has abolished some fuel levies until mid-April, but fuel prices are still way above what they were before the war. Increased shipping costs for local businesses have hurt them economically, with customers dropping off.
Algeria is one of the European Union's largest suppliers of LNG, and has entered talks with Spain and Italy, as well as fielding enquiries from other countries, including Vietnam. It could benefit economically.
Egypt relies on imported oil, so the government has introduced measures to keep fuel usage down, including the mandatory closure of retail businesses at 9pm for a month, dimming street lights and roadside advertisements. It has slowed down some large government projects, and increased the price of both petrol and public transport fares. Non-essential workers have been ordered to work from home one day per week.
In Ethopia, security institutions have been prioritised, along with, major government projects, key industries, and essential goods production. There are fuel restrictions, and petrol stations are prioritising public transport. Fuel supplies to the Tigray Region have been completely suspended.
Ghana, which has limited refining capacity, relies on imported refined products, but is supplied by a range of producers, including Russia.
Kenya is badly affected by the war, as it sources all its oil from the Middle East. There has been panic buying of petrol, but the Energy and Petroleum Regulatory Authority has maintained stability in prices for 30 days. The war has also affected some exports, with ships taking longer to reach their destination, so the Kenya Ports Authority has prioritised the export of perishable products such as tea, flowers, and avocados. The fuel crisis has greatly impacted Kenya's important floriculture industry.
Maruritius is dependent on oil imports for generating power, and, after a shipment of oil had not arrived as scheduled on 30 March, only 21 days of stock remained in the country. The government arranged for more expensive alternative fuel to be shipped from Singapore, and imposed restrictions to reduce wastage of fuel.
The Namibian Government reduced fuel levies by 50% for at least three months, using its National Energy Fund to stabilise prices until the end of June. Gas and oil exploration continues in the country, which expects to start producing oil by 2030.
Nigeria is a major oil producer, and its large Dangote refinery has increased production to help meet world shortages. While the government and oil companies may benefit from this, ordinary people will still experience the rising costs of transport.
Saudi Arabia supplies most of South Africa's fuel. The South African Government has said that there was no shortage of fuel in the country, but prices have increased and some petrol stations have introduced their own rationing of diesel. With more traffic potentially taking the route around the Cape of Good Hope, and ships needing to fuel along the African coast, some ports such as Walvis Bay, Cape Town, and Durban may come under increased pressure, but also benefit from the diversion.
At the end of March, Uganda only had a few weeks' worth of stock.
South Sudan has large oil reserves, but most of it is exported and it relies on imports for refined products. Because the country generates 96% of its electricity from oil, the government has started rationing electricity in the capital, Juba, which affects businesses, and rolling power cuts are expected to continue.
Zimbabwe has announced plans to scrap some taxes on fuel imports, which rose 40% in under a month. It has increased the amount of ethanol in its petrol from 5% to 20%.