On February 28, 2026, joint US-Israeli airstrikes on Iran triggered what the International Energy Agency has since called the largest oil supply disruption in recorded history. Within days, tanker traffic through the Strait of Hormuz — the narrow 21-mile channel that funnels roughly 20 million barrels of oil and petroleum products daily — had all but stopped. What followed was not just an energy crisis. It was a stress test for every supply chain on earth that depends on the Persian Gulf.
The Price Shock: How Fast and How Far
The numbers tell a stark story. Before the conflict, Brent crude sat around $75 a barrel. By March 9, it was touching $92, and some analysts were openly discussing $115 or higher if the disruption continued into a second month. West Texas Intermediate surged past $87 a barrel mid-week, pushing average US gasoline prices to $3.54 per gallon — the highest since mid-2024 and a 21% jump in under a month.
But the ripple effects go far beyond the petrol pump.
The Strait of Hormuz: More Than an Oil Artery
The Strait of Hormuz is not just an oil artery. Saudi Arabia, Iraq, the UAE, Kuwait, and Qatar together use it to ship their energy exports to the world. With the strait effectively closed, Gulf producers have had to suspend shipments of an estimated 140 million barrels of oil — roughly 1.4 days of global demand — leaving refiners scrambling. Saudi Aramco's Ras Tanura facility, the kingdom's largest refinery and export terminal, has also been forced to shut down following drone attacks, adding yet another layer of disruption to an already strained system.
Amin Nasser, CEO of Saudi Aramco, warned on an earnings call that the conflict had caused "a severe chain reaction" and "a drastic domino effect" far beyond shipping — affecting aviation, agriculture, automotive, and multiple other industries simultaneously.
The Aluminium Market: The Casualty Nobody Is Talking About
The aluminium market is another casualty that has received less attention than oil. In 2025, the Middle East accounted for roughly 21% of US unwrought aluminium imports. Matt Meenan of the Aluminum Association told reporters this week that "industry concerns may grow" the longer the conflict continues, warning that Americans should expect product shortages and higher prices across a wide range of manufactured goods.
Asia Takes the Hardest Hit
For Asia, the shock has been especially severe. The continent imports around 90% of the oil that passes through the Strait of Hormuz. When markets opened on March 9, South Korea's KOSPI index triggered a circuit breaker after falling 7.72%, Japan's Nikkei sank 6.45%, and Taiwan's TAIEX dropped nearly 5%. These are not corrections — they are market panics driven by the sudden realisation that energy security assumptions built over decades had collapsed overnight.
The IEA Responds — and Its Limits
The IEA responded on March 11 with an unprecedented release of 400 million barrels from emergency reserves across its 32 member countries — the largest collective action in the organisation's history. IEA Executive Director Fatih Birol called it a response to "oil market challenges that are unprecedented in scale." But even this historic intervention has limits. JP Morgan analysts noted that the market had shifted "from pricing pure geopolitical risk to grappling with tangible operational disruption, as refinery shutdowns and export constraints begin to impair crude processing and regional supply flows."
The Federal Reserve's No-Win Position
The White House has publicly maintained that "oil markets remain well supplied," but the Fed finds itself in an uncomfortable position. As Mark Zandi, chief economist at Moody's Analytics, noted: "Higher oil prices are another negative supply shock, lifting inflation and hurting growth — putting the Fed in a no-win situation." Futures markets are now pricing in near-zero probability of a rate cut at the next FOMC meeting.
What Businesses Need to Accept Right Now
For businesses that depend on just-in-time supply chains, the message is clear. The era of assuming cheap, stable energy as a background condition is over — at least for the foreseeable future. Every input cost, from plastic packaging to industrial chemicals to freight, is about to get more expensive. The only open question is how much, and for how long.
The Strait of Hormuz has always been described as a chokepoint. We are now living through what happens when it actually chokes.