The ongoing United States-Israeli war on Iran, now in its eighth day, could leave consumers and businesses worldwide facing weeks or even months of elevated fuel prices, even if the conflict ends quickly. Disruptions to energy infrastructure, damaged facilities, and risks to shipping are straining global supply chains.

The conflict poses both a global economic risk and a political challenge for Donald Trump ahead of the U.S. midterm elections, as voters remain sensitive to rising energy bills and wary of foreign entanglements.

Since the outbreak of hostilities, global oil prices have surged more than 25 percent. In the U.S., the national average petrol price reached $3.41 per gallon ($0.90 per litre) on Saturday, up $0.43 over the past week, according to the American Automobile Association (AAA). Analysts at Goldman Sachs warned that oil could exceed $100 per barrel if disruptions to shipping continue.

US crude settled just below $91 per barrel on Friday, marking the largest weekly gain on record since 1983. “The market is shifting 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,” JP Morgan analysts told Reuters.

The conflict has already disrupted roughly 20 percent of global crude and natural gas supply, as Iranian forces target ships in the Strait of Hormuz—a key shipping lane between Iran and Oman—and strike energy infrastructure across the region.

A near-total shutdown of the strait has forced major oil producers—including Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait—to suspend shipments totaling around 140 million barrels of oil, roughly 1.4 days of global demand.

With over 80 percent of global trade moving by sea, according to the World Bank, these disruptions are driving up freight costs and delaying deliveries worldwide.

Djibouti’s Finance Minister, Ilyas M. Dawaleh, warned that the conflict would “bring severe economic consequences for developing countries,” particularly small states dependent on maritime trade. Meanwhile, Abdel Fattah el-Sisi described Egypt’s economy as being in a “state of near-emergency,” citing rising inflation.

Oil and Gas Storage Pressures

The crisis has caused oil and gas storage in Gulf facilities to rapidly fill, forcing production cuts in Iraq and Kuwait, with the UAE expected to follow. A source at a state oil company told Reuters, “At some point soon, everyone will also shut in if vessels do not come.”

Amir Zaman, head of the Americas commercial team at Rystad Energy, warned that even if the conflict ends, restoring production could take days, weeks, or months, depending on the type and age of the affected oilfields and the extent of the shut-ins.

Iranian attacks have also targeted regional refineries and terminals, forcing shutdowns. Qatar declared force majeure on large volumes of liquefied natural gas (LNG) exports after drone strikes, potentially taking at least a month to return to normal. Qatar supplies 20 percent of global LNG.

Saudi Aramco’s Ras Tanura refinery and crude export terminal have also been closed due to attacks, with details on the damage still emerging.

Economists warn that the combination of higher fuel prices, disrupted production, and slower global trade could slow economic growth while putting further pressure on consumers and businesses worldwide.

This conflict underscores the fragility of global energy markets and the wide-reaching effects of regional geopolitical crises on prices, supply chains, and economic stability.