The combined impact of military strikes attributed to the United States and Israel, alongside the death of Supreme Leader Ayatollah Ali Khamenei, has sent shockwaves through international energy markets.
Despite years of sanctions, Iran currently produces approximately 3.3 million barrels of oil per day (bpd), a significant increase from the 2 million bpd recorded in 2020. Tehran exports nearly 90% of this output to China, utilizing a “ghost fleet” of aging tankers that frequently disable tracking systems to bypass international restrictions.
Vulnerable oil and gas infrastructure
Industry analysts warn that Iran’s most critical economic arteries are now at risk. The primary oil fields are concentrated in the Khuzestan province, supported by several high-capacity facilities:
- Abadan Refinery: Capable of processing over 500,000 bpd.
- Kharg Island Terminal: The country’s main export gateway in the Persian Gulf, handling over 2 million bpd. Any damage here would be catastrophic for the Iranian economy.
- South Pars Gas Field: The world’s largest natural gas field, shared with Qatar. While most of its 276 billion cubic meters of annual production serves domestic needs, previous Israeli strikes in June 2025 targeted its processing units, causing temporary market spikes.
The Strait of Hormuz: A global “chokepoint”
The “nightmare scenario” for global markets remains the potential closure of the Strait of Hormuz, a narrow waterway through which 20% of the world’s oil and refined products pass. While Saudi Arabia and the UAE possess alternative pipelines, a total blockade would trigger unprecedented price surges.
Brent crude rose to $73 per barrel on Friday, its highest level since July. Historical data suggests that a 1% decrease in global supply typically results in a 4% price increase. Analysts predict that a full-scale escalation could drive investors toward “safe havens” such as the US dollar, Japanese yen, and gold, while high-risk stocks could drop by 1-2%.
OPEC+ response and record reserves
In anticipation of supply gaps, OPEC+ members, led by Saudi Arabia and the UAE, are considering production increases for April. The alliance may exceed the previously planned hike of 137,000 bpd to stabilize the market.
Meanwhile, Iran has secured a record 200 million barrels in offshore floating storage—equivalent to nearly two days of global consumption—as a strategic buffer against potential US strikes on its land-based facilities.
The duration and intensity of the current military operations and Tehran’s potential response in the Strait of Hormuz will ultimately dictate the severity of the shock to the global economy.
